A Guide to Furlough

Through their plans to fight the Coronavirus/COVID-19, the UK government published guidance in March 2020 on their Job Retention Scheme, more commonly referred to as 'Furlough'. The scheme means that workers who might otherwise be made redundant could keep their jobs, stay at home and claim up to 80% of their wages from the government through their employer.

The following guide offers more information on Furlough, including who is entitled to claim, whether there is a cap on how much can be claimed, employee and employer rights during the scheme and how the funds are accessed.

Who can claim Furlough?

The Furlough scheme is open to all UK businesses and does not prioritise size or financial turnover. The government will pay up to 80% of employee wages up to a maximum of £2,500 per month, for all UK businesses.

The UK government will accept furlough applications from any of the following, whether they are full time or part-time staff:

• Employees
• Agency workers
• Workers
• Zero-hours contract staff
• Flexible contract staff
• Apprentices

Does it matter that I've only just started my job?

Furlough payments will be made to those eligible as long as they were on their employers' PAYE records before 19th March 2020. Initially, this date was 28th February 2020, but the government extended it, allowing more people to become eligible.

Can I work whilst I receive Furlough payments?

If you are put onto Furlough, you are not allowed to continue to work for your employer. However, if you have more than one employer (a second job), you are entitled to receive Furlough payments from all employers up to a maximum of £2,500 per month.

You are allowed to continue to work for another employer, even if you are Furloughed by one. This includes a new employer - as long as you do not breach your existing employment contracts or go against any Coronavirus restrictions. Effectively, this means that if you normally have one employer and have been Furloughed, you should be entitled to get a new job whilst on Furlough, as long as you are not in breach of your usual employment contract.

Can I volunteer when on Furlough?

You are allowed to volunteer whilst on Furlough and you can do this for the NHS, within your community or even for your normal employer, as long as the work that you are doing does not bring in income or create revenue for your employer.

If you are on Furlough, your employer cannot ask you to work or expect you to carry out any duties. However, if you want to help on a voluntary basis, you may still be able to complete some tasks, such as receiving training.

If your company has not Furloughed you, they might ask you to work reduced hours so that they can reduce payroll costs. You might also be asked to take annual leave, particularly if the workload is reduced because of the current situation.

Can I get a second job to top up the 20% earnings that I am losing through Furlough?

You are allowed to take on new and additional employment if you are on Furlough but your Furlough payments will remain capped at £2,500 per month. You must also be sure that taking on additional work is not a breach of your current contract with your existing employer.

How long will Furlough payments be made for?

Furlough payments are reassessed in three-week cycles, with the government extending Furlough until the end of June 2020 at the time of writing.

Your employer may decide to call you back from Furlough early if there is a business need that allows you to work safely and legally. Your employer will likely have discussed communication methods with you whilst you are on Furlough and so you should expect to have an understanding of the notice to be called back and how your employer intends to contact you to arrange this.

For the majority of businesses, the length of time that staff will be on Furlough will depend on factors including:

• How long the government will make Furlough payments.
• How long lock-down rules are in place
• When the business can operate again and how each employee fits into that plan.

Can I be made redundant whilst I am Furloughed?

Furlough or Job Retention Scheme was introduced by the government to ease the financial burden on businesses who may not be able to make the same levels of money during the Coronavirus and to help ensure that employees do not lose their jobs as a result. With that in mind, the essence of Furlough is to reduce the need for redundancies. However, your employer is not obliged to keep any employees hired once Furlough ends, but they are not allowed to use Furlough payments as subsidies in a redundancy package.

If you were made redundant since 19th March 2020, your employer is allowed to rehire you under the Furlough rules, therefore allowing you to remain in their staff numbers and eligible for the receipt of Furlough payments. However, any person hired after 19th March 2020 as a new employee, will not be eligible for the receipt of Furlough payments.

Where does the money come from for Furlough payments?

Furlough payments are made by the government and serve to give businesses some respite from payroll expenses. This is in the hope that by the government meeting this cost, businesses won't need to make redundancies and will hopefully survive this crisis.

To be fair to those whose wages vary from month to month, your employer should base your salary on what you earned in the same month last year, or what your average monthly earnings were in the 2019/20 tax year. They should choose the higher of these two figures. Your employer is not expected or obliged to top up your Furlough payments to give you 100% income during this time.

Will I be put onto Furlough if I am long-term sick?

People who are put onto Furlough maintain their employment rights as before. This means that if you are long-term sick, you will be eligible to receive statutory sick pay until you recover and then you can be put onto Furlough at that point.

Those who have childcare needs or who are shielding because of personal health concerns are entitled to receive Furlough too.

Will I be put on Furlough if I am on maternity or paternity leave?

Any worker who is currently on maternity, paternity, shared parental leave or adoption leave will still have statutory pay from the government. They will also be entitled to receive Furlough payments if their statutory leave ends within the Furlough period.