How do Bank Holidays apply when on furlough leave?
Being on furlough leave from work is just like taking annual leave from work. The entitlement for annual leave will be written into employment contracts and employee handbook. Bank holiday entitlement should also be stated in the employment contract and employee handbook. If an employee takes annual leave during a week when there is a bank holiday on a Monday, this is usually paid in the following way: Monday (bank holiday), Tuesday (annual leave, Wednesday (annual leave), Thursday (annual leave) and Friday (annual leave). Therefore, during that week, only one day is a bank holiday, the rest is annual leave, which will be deducted from both annual entitlements.
There is no current guidance as to how individuals should be paid or accrue annual leave or bank holidays whilst on furlough. Some employers are paying 100%, whilst others are calculating it all based on 80% of hours worked.
Until further guidance is provided, it is recommended you consult with your HR provider to work out which policy is the most suitable to your business.