Impact of Covid-19 on annual leave for employees – options for employers

Impact of Covid-19 on annual leave for employees – options for employers - Centric HR

Lots of employees in the UK have been affected by the Covid-19 pandemic and the impact on them not being able to take their annual leave during the leave year.  It is great to see that the rules around carry over will benefit employees and allow them to take any accrued leave over the next two years.

Employers on the other hand are nervous about the balancing act they have to navigate ensuring their workforce takes the leave they are entitled to, to get a break from their work and support their health and wellbeing with the need to consider the impact of so much leave still to take in the coming months and how this might affect their business.

What can employers do?

Firstly, you have a duty to consider the wellbeing of all of your employees and to ensure that where possible they take the leave they have accrued and the statutory minimum at least in order to regroup and rest after such a difficult 12 months.

You can decide just to talk to your staff and work together to ensure the leave that is owing is planned in as best as possible to ensure the employees get their well-earned rest, but business can continue as normal.

Alternatively, you could rely upon an existing policy whereby employees can sell back a proportion of their leave entitlement to the Company and remind staff they have this option.

If you don’t already have such a policy or practice in place, you could for a temporary period allow your employees the choice to opt-in to selling a maximum number of days back to the Company. Normal practice is for employees to be able to ask to sell back up to a maximum of 5 days.  The 5 days can be pro-rata for part-time employees and the payment for the days holiday is at the employee’s basic salary.  The payment is classed as additional salary so would be subject to tax and National Insurance contributions in the normal way and the payment would be non-pensionable. You should make employees aware that for some the additional payment may take them into a higher tax band, so they should consider the implications for them if this were to be the case.

Just remember, the purpose of annual leave is to enable staff to take time away from the workplace for rest and recuperation. This is now more important than ever. Whilst it may be appealing to partially resolve the issue of outstanding annual leave by employees selling annual leave, their health and wellbeing is critical to the on-going response to COVID-19 and must be carefully considered.

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If you would like more information about implementing such a scheme for your workforce or other matters, give Centric HR a call on 03333 660 567 or contact us here.

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Sandra Berns

Centric HR was founded by Sandra Berns, a confident and versatile Human Resources and Organisational Development Practitioner with 25 years demonstrable experience and a Fellow of the CIPD. Sandra has both Operational and Strategic HR expertise across Public and Private sectors and has assisted senior teams in meeting challenging workforce objectives in many corporate environments.