Holiday Pay When Off Sick

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Peninsula Group, HR and Health & Safety Experts

(Last updated )

What happens to an employee's holiday pay when they're off sick? It can be a confusing situation for employers and their staff-this clears up everything you need to know.

From time to time, your business might face a situation where an employee’s planned holiday leave clashes with a period of unexpected sickness. As Acas confirms, that can cause a great deal of confusion for business owners and staff.

How, exactly, do different types of leave work if they occur at the same time?

To help you avoid any further misunderstandings, our guide provides everything you and your workforce need to know.

Holiday pay and your business

Staff on your payroll have the statutory right to take a minimum of 5.6 weeks of holiday time (with pay) each year. However, holiday pay entitlement can vary across businesses and you can choose to offer more in the employment contracts you draw up with each employee.

Sick pay is a little different. Although many staff members think they can automatically claim full pay for sick days.

You can choose not to pay them occupational sick pay—or during instances when they’re sick for less than four consecutive days. It depends on what you want your policy to be.

Taking holidays during sick leave—the basics

Statutory holidays continue to accrue, even when a member of staff is off work through illness. It doesn’t matter that they’re not fit enough to attend work or how long they’re off.

For holiday days an employee doesn’t use due to bouts of sickness, they can carry over only the first four weeks of the full 5.6 available.

Additionally, if an employee is sick before or during one of their planned periods off, they can take that as sick leave.

Holiday pay whilst off sick

It’s a common question from employees, “Do you still get holiday pay when off sick?” They can change their holiday leave to a sick day—after that, they could be due Statutory Sick Pay (SSP).

That’s providing they meet the qualifying conditions. But they’ll need to meet the qualifying conditions you set to do so. To do that, they can phone in to tell you they’re sick. Then once they’re back in work, they can clarify the situation with you.

What about occupation sick pay?

In response to that common question, “Do you lose holiday pay when off sick?” Yes. But it depends on the conditions and if the staff member meets the policies your business has.

You may have a contract that pays staff full for single instances of sickness. If so, then you should pay that when they’re sick on holiday, too.

Bank and public holidays

But what about staff using bank holiday entitlement when off sick—will they receive pay? It really depends on whether the bank holidays make up part of their holiday entitlement.

Under the Working Time Regulations 1998, along with the 5.6 weeks’ holiday pay covered in Holiday pay and your business further above, entitlement depends on your policies.

If you grant leave and include bank and public holidays, your employee can claim entitlement for them. The result is the staff member can take a day off in lieu if their sickness day lands on a public holiday.

Although contractual terms can affect this, such as if they have to work on those days due to the nature of their job.

On a final note, payment in lieu of holiday leave is only available if the contract ends. That means if the employee is leaving your business, they’ll receive the pay you owe them for the leave they haven’t taken.

We’re here to help

In need of assistance with your holiday and sickness policies? Get in touch for immediate help: 0800 028 2420.

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