Pay during the notice period
Anyone legally classed as an employee must be paid as normal when they’re working their notice period.
If an employee is off work during their notice period, the amount they’re paid will depend on the type of notice they have.
Working out the notice period
It's important to know if someone has a statutory notice period, (the legal minimum notice period). Or, if the employee has an enhanced ('contractual') notice period. Check their employment contract to find out.
Statutory notice if an employee is dismissed or made redundant
If the employee has worked for the employer for:
- 1 month to 2 years – the minimum notice is 1 week
- 2 to 12 years – the minimum notice is 1 week for each full year they’ve worked
- 12 years or more – the minimum notice is 12 weeks
For example, if an employee's worked for their employer for 4 years and 9 months, they're entitled to at least 4 weeks' notice.
Statutory notice if an employee resigns
The employee should check their contract to find out how much notice they must give. If it does not say, they must give at least 1 week’s notice if they’ve worked for the employer for more than 1 month.
The employee should check their contract to find out:
- how much notice they must get if they’ve been dismissed or made redundant
- how much notice they must give if they resign
Employers can give employees more than the statutory notice, but they cannot give employees less.
If employers give employees the same or less contractual notice as statutory notice, the employee must get statutory notice.
Working out notice pay
Statutory notice pay
Employees must get their full normal pay during their notice period.
If someone's pay is different each week, the employer should use the person's average weekly pay to work out their notice pay.
Work out weekly pay by using the 12 weeks leading up to the first day of the notice period. Add up the total amount of pay during the 12 weeks and divide it by 12 to get their average weekly pay. This is the minimum amount they must receive during their notice period.
Weekly pay should also include:
- regular overtime, if the employee's contract says they must get paid for it
- any bonuses or commission
Contractual notice pay
Employees should check their contract to find out what notice pay they’re entitled to. If they work their notice, they must get their full normal pay for any hours they work.
Furlough and statutory notice pay
If the employee leaving has been on 'furlough' (temporary leave) during the coronavirus (COVID-19) pandemic, they may have received reduced pay in the 12 weeks leading up to their statutory notice period.
If they usually work fixed hours, they must be paid their full normal pay while they’re on statutory notice, not their reduced furlough rate.
If their hours or pay vary, the employer must top up the pay for any furloughed hours to 100% when calculating notice pay.
The employer can still claim payments from HMRC's Coronavirus Job Retention Scheme during the notice period.
Example 1 – someone who works variable hours
An employee with variable hours has been on furlough for the last 12 weeks and is now leaving. The employer had already worked out the employee’s average hours and full normal pay when they claimed from HMRC’s Coronavirus Job Retention Scheme.
So the employer already knows the employee works an average of 30 hours a week and gets paid £10 an hour. This means the employee must get their full normal pay of £300 a week during their notice period.
Example 2 – someone on flexible furlough
An employee who normally works 30 hours a week agreed to be furloughed for half this time.
They work for 15 hours a week on full pay, receiving £10 an hour. They’re put on flexible furlough on 80% pay for the remaining 15 hours, receiving £8 an hour.
The employer must top up their pay during flexible furlough to 100% when calculating notice pay, so they must receive £300 a week notice pay.
Example 3 – someone who has returned to work and is working more hours than usual
The employer had already worked out the employee's average hours and full normal pay when they claimed from HMRC's Coronavirus Job Retention Scheme. The employee normally works 30 hours a week on £10 an hour, receiving £300 a week.
They spent 6 weeks on furlough earning 80% pay. When they returned to work, they worked 40 hours a week for 6 weeks, receiving £400 a week.
To work out their weekly pay, the employer adds up the 6 weeks of pay during furlough, at their full normal pay of £300 a week. Then they add up the 6 weeks the employee worked at £400 a week.
The employer adds up these figures and divides by 12 to work out their average weekly pay of £350 a week. This means the employer must pay the employee at least £350 notice pay a week.
When someone is off work during their statutory notice
The employee leaving must get full pay even if they're off during the statutory notice period. This includes if they're:
- off sick
- on holiday
- on furlough
- on maternity, paternity or adoption leave
- willing to work but the employer has asked them not to
This means, for example, that someone getting Statutory Sick Pay before the notice period started would get full pay again (even if they're still off sick).
If someone refuses to work their notice period, they’ll have breached their contract and will not usually be entitled to be paid for it.
When someone is off work during their contractual notice
During contractual notice, the employee will not be entitled to their full normal pay if they're off work but they may be entitled to other payments depending on the reason they’re off work. For example, if they're off sick the employee will be entitled to Statutory Sick Pay.
This applies no matter who actually gave the notice. For example, if the person leaving resigned.