Essential staff will not have to use all their annual leave allocation this year, the Government has said.
The move will help key industries remain well-staffed as the UK battles the coronavirus outbreak.
Business Secretary Alok Sharma said rules will be relaxed to allow up to four weeks of unused holiday to be carried into the next two leave years.
Separately, the Government will also cover employer pension payments for furloughed staff.
Mr Sharma said: "Whether it is in our hospitals, or our supermarkets, people are working around the clock to help our country deal with the coronavirus pandemic.
"Today's changes will mean these valued employees do not lose out on the annual leave they are entitled to as a result of their efforts, and employers are not penalised."