Coronavirus (COVID-19) Q&As
The Government is issuing new information regularly - further clarification and more details for employees during coronavirus - updated April 6th 2020
Who can be furloughed? Anyone who is on PAYE and who was on their employer’s payroll on 28th February 2020 including company directors, workers on zero hours’ contracts, those on fixed term contracts, flexible contracts, and even agency workers who work via an umbrella company or through their own personal service company, provided they are paid through PAYE.
Apprentices may also be furloughed, but must receive Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training.
Any entity with a UK payroll can apply (to put its staff on furlough), including businesses, charities, recruitment agencies and public authorities (though please note, where a public authority receives public funding it is expected to use this to fund staff wages )
Those employed by individuals, such as nannies and cleaners, can also be furloughed if they are paid via PAYE
Those shielding in line with guidance from Public Health England and those with caring responsibilities (e.g. those with young children) are named in the guidance as categories of employee who would be suitable for Furlough Leave.
Those with more than one job can be furloughed from both jobs (from the same or different employers)
How long can I be furloughed for? You must be furloughed for a minimum of 3 weeks. However your employer may be able to ask you to return to work after 3 weeks, and rotate you with another member of staff who might then be furloughed instead. Each separate period of Furlough Leave must be for a minimum of 3 weeks. The furlough agreement must be in writing and must be kept by your employer for 5 years.
What can I do whilst on Furlough Leave? You must not undertake any work for the business that brings in money or profit or provide normal services. Employees can however undertake training for their employer or take on volunteering work. If you undertake training at the request of your employer you must receive National Minimum Wage for all hours that you undertake such duties. If 80% of pay therefore takes you below National Minimum Wage, whilst it is fine for you to receive this on “normal Furlough Leave”, if you undertake any training during Furlough Leave, your employer should make up your wages to 100% of normal pay for time you spend training.
You can also obtain work with another employer whilst on Furlough Leave from your original job. This is a significant clarification to the rules and we believe it was devised to help industries struggling for capacity, such as farming, distribution and food retail, to recruit employees for a temporary period during these difficult times. However, if your contract of employment prevents you (or as is more often the case, obliges you to seek your employer’s permission to take on additional work whilst you are employed by that business) then you may not be able to do so, if your employer objects. Therefore if you have been furloughed and have found another job, you do not have to resign, but can request that you continue on the Furlough Leave scheme with your original employer.
What if I am off sick when the Furlough leave scheme is applied in my workplace? You are entitled to receive SSP until you are well enough to return to work, after which you will be eligible to be furloughed and to receive Furlough leave pay
You are still entitled to receive maternity pay, if you are on maternity leave, and your employer can claim for any enhanced contractual maternity pay it is obliged to pay to you, via the furlough leave scheme, albeit subject to the maximum payment of £2500 per month.
How much should I receive in Furlough Leave pay? 80% of your normal earnings, or salary up to a maximum of £2500 per month (that is, if you receive £1800 per month, you will be eligible to receive 80% of £1800, and if you normally earn £3000 per month, you will be eligible to receive £2400 (80% of £3000), if you receive up to £37,500 per annum you will receive 80% of your monthly salary, however if you receive more than £37,500 per annum you will still only receive 80% of £37,500, because furlough leave is capped at £2,500 gross per month. Your employer should still pay its National Insurance and Pension contributions. If you earnings vary and you have been employed for more than 12 months then you should receive the highest of either the:
- same month’s earning from the previous year
- average monthly earnings for the 2019-2020 tax year
If you have been employed for less than 12 months, you should receive 80% of your average monthly earnings since you started work.
If you only started in February 2020, 80% of your pro-rata earnings so far (subject to the £2,500 gross per month cap).
You should receive contractual commission, overtime and other regular payments that you normally receive as part of your wages, but this does not include tips or discretionary bonuses.
Benefits in Kind should still be paid by your employer although it will not be able to claim for these costs (e.g. company car, private health care).
You will still have to pay tax and employee national insurance and pension contributions on your furlough leave pay.
Your employer does not have to top up your pay to 100%.
Your employer cannot use Furlough leave payments to fund redundancy payments.
Your employer can require you to take holiday during Furlough leave, subject to giving you the appropriate notice (twice as much notice as the holiday it requires you to take at any one time (e.g 10 days’ notice if it requires you to take 5 days’ holiday) but a recent amendment to the Working Time Regulations means that you are also entitled to carry over 4 weeks of your unused holiday, for up to 2 years, if you are unable to take it during the current holiday year.
What could my boss do during the cornoavirus outbreak with staff? There are three main options available to employers - redundancy, furlough or send staff home with no pay.
What is Furlough leave? Furlough leave is a new and is to be used in circumstances where employees would otherwise have been laid off or made redundant.
How does furlough work? Your will be paid essentially not to work, and it is 80% of your wages up to £2,500 a month, plus your employer will pay the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. It is important to note that during this time however you must not undertake work for or on behalf of the business
Do I have to apply for furlough? Your manager in most cases will discuss it with you and provide all the details in writing and you will have to agree to the process. For some staff it is a preferred option. Any compnay can offer it whether they have 5 or 500 employees and it is applicatble to all forms of businesses, recruitment agencies, (agency workers paid through PAYE) and charities.
How does Furlough work? You are paid 80% of your wages up to £2,500. Employers can choose to fund the difference between 80% and the normal wage but do not have to.
Is there a difference as to which staff can be furloughed? Full and part-time employees, those on agency contracts and those employees on flexible or zero hours contracts can all be furloughed.
Do the usual employment law polices continue whilst I am furloughed? All employment law practices such as equality and discrimination laws will apply in the usual way. Business owners or your HR team should write to their employee confirming that they have been furloughed and keep a record of this communication. Your continued rights include Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
I am on sick leave and undertaking isolation,what is the situation here? If your are on sick leave or self-isolating you should should get Statutory Sick Pay, but can be furloughed at a later date.
Can I return to work if required? You must be furloughed for a minimum of three weeks but can then come off furlough. Employers cannot rotate staff weekly between furlough and non-furlough, but you can return to work as needed after three weeks.Some businesses may rotate furlough, speak to your employer about any concerns you have.
I am on zero hour contracts, can I be furloughed? Yes, all temporary contracts and those workers in the gig-economy are covered by the scheme and paid 80% up to £2,500 a month as long as you are paid through the PAYE scheme.
Is it a Government scheme? Furlough leave is designed to avoid the need for laying staff off and/or making redundancies. It is a completely new route to help businesses retain workers in these unprecedented times. The employer would ideally have an express lay off clause in the employment contract to be able to use Furlough leave, but most staff are unlikely to object to being furloughed when the alternative in the vast majority of cases is likely to be redundancy.
What are lay off and short time working options? They are derived from statute in the Employment Rights Act 1996 and provide for guaranteed payments of £29 per day (increasing to £30 per day from 6th April 2020) but are limited to 5 days guaranteed pay in any 3 month period. Under normal circumstances, for an employer to be able to rely on the benefits of lay off or short time working, there must be an express contractual right in the employee’s employment contract or it must be in an industry where lay off/short time working is seen as custom and practice. However, in these unprecedented Coronavirus times lay off may be able to be used more widely, where agreement is obtained, as the alternative is unfortunately likely to be redundancy.