Background The guidance deals with accrual of annual leave entitlement, taking holiday during furlough, the rate of holiday pay and the new right to carry forward leave that could not be taken because of COVID-19. It repeats what everyone already knows, namely that furloughed workers continue to accrue entitlement to annual leave under the Working Time Regulations 1998. Importantly, the guidance suggests that employers can require workers to take holiday while on furlough. The guidance states: “If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.” So two steps forwards and one step backwards, because the guidance doesn’t definitively say whether annual leave taken during furlough meets the European law definition of annual leave, which says that annual leave must enable the worker to rest and to enjoy a period of relaxation and leisure. This is despite the fact that one can detect a remarkable similarity between the guidance and the European law definition! Conclusion The message hasn’t really changed in terms of there being some risk to employers (see previous E-News) however the guidance should give further confidence to employers that requesting furloughed workers to take some annual leave is sensible provided it is done proportionately. There are obviously good commercial reasons in wanting workers to take some annual leave, not least to reduce the amount of annual leave outstanding when the worker returns to work, and to take the opportunity of the government funding 80% of the annual leave payment.