How Coronavirus Affects Annual Leave for Employers
Annual Leave for Employers

How Coronavirus Affects Annual Leave for Employers

2020 was a whirlwind of a year, forcing people all around the globe to reduce their social contact and stay at home! Now that we’ve hit 2021, the pandemic is still with us and it has left many workers still on furlough, wondering what happens to their annual leave if they were not able to take it last year?

What is Annual Leave and Who is Eligible? 


Most workers in the UK are entitled to 5.6 weeks of paid annual leave (also known as holiday leave) – Including workers that have full/part-time contracts,  zero-hour contracts, irregular hours and agency workers.

The only exception is for those who are fully self-employed.


From the first day that you start working, you will begin to accrue (build-up) annual leave even if you are on sick leave, maternity/paternity/adoption leave or a probationary period.

Having paid days off allows employees to relax and recuperate, most people need breaks from their work to stay motivated and interested in their jobs.


How many days annual leave you are entitled to depends on how many hours and days you work and any additional arrangements made by your employer .

Your employee handbook should detail how much annual leave you can take.

Statutory annual leave entitlement for most employees who work 5-days a week is 28 days paid leave (equivalent to 5.6 weeks).


People who work part-time are also entitled to 5.6 weeks leave, but it will work out to fewer days.

For example, if a part-timer worked 2 days a week they would be entitled to 11.2 days leave every year (2 x 5.6 = 11.2).

Workers who have irregular hours can use the government’s entitlement calculator to work out how many days paid leave you can take.


If you do not use all your annual leave in a year, your employer may allow you to carry over some of your leave to the next year.

If you are entitled to 28 days of leave, you can carry over 8 days maximum – However, if you get more than 28 days paid leave, your employer may allow you to carry over additional leave.


It is your legal right to receive paid leave, this means if you think your rights aren’t being met by your employer you can make a formal grievance.

If this is not resolved, you can take your employer to an employment tribunal which could lead to legal fees and proceedings. 


How Has Coronavirus Affected Annual Leave?


The government has given employers and employees more flexibility when concerning annual leave, amending the Working Time Regulations (1998) .

This will enable workers in the UK to carry over 4 weeks of annual leave into the next 2 working years (The Working Time Coronavirus Amendment Regulations 2020).

This amendment covers employees that; had annual leave denied because they needed to cover for coworkers, are critical workers and those who couldn’t take leave due to staff shortages.


However, this new amendment does not cover workers who were unable to take leave due to travel restrictions .

This is because these workers would still have the opportunity to take that time off (even if it means having a week off at home).


Employers should be encouraging employees to take as much of their annual leave as possible to ensure the health of employees is being protected.

When this is not possible and the leave is carried over into the next year, employees will still accrue annual leave for the next years .

This means they will be entitled to extra leave in the next 2 working years.


Leave that is carried over must be taken as leave, the employer cannot replace the leave with a financial package (payment in lieu).

Additionally, if an employee leaves employment, employers must pay the worker for any untaken leave.

This included any carried leave covered under the Coronavirus Exemption and any accrued leave in the relevant work year.

An employer can require that an employee take annual leave where it is reasonably practical, having a notice period of double the length of the holiday (from the start date of the leave).

Employers also have the right to cancel annual leave if given enough notice, at least the length of the leave.

The rules on the notice period can be changed by a written and signed agreement, like a contract.

What About Furloughed Employees Annual Leave?


Workers who have been placed on the furlough system are still able to accrue annual leave (plus any additional leave set out in the employment contract) and are still entitled to take their annual leave while on furlough.

These furloughed employees should communicate with their employers to explain why they need to take annual leave before their request has been processed.


When taking their annual leave, employees are entitled to their full-rate of pay in accordance with the normal regulations.

However, even when taking annual leave, the government will still fund 80% of the employee’s wage – This makes it far less expensive for employers!

If an employer is unable to fund the pay difference, this qualifies as being not reasonably practical for employees to take their annual leave.


This allows these furloughed employees to carry over their annual leave into the next 2 working years (as detailed above).

Although, it is preferable that employees on furlough are given the opportunity to take their annual leave in the correct working year.


Furloughed agency workers with a contract that sets out their entitlement to paid leave are still able to accrue their annual leave and can usually carry over any unused leave!

Holiday provisions should continue as they did before the furlough system was introduced.

As for regular worker employers, agency worker employers will still receive 80% of their employees when taking annual leave.

Meaning agency employers are also required to fund the difference during annual leave.

Does your business need annual leave or any other HR support during the coronavirus pandemic? Look no further! Call 0330 400 5490 or Click here and fill in our contact form.

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