Date last updated: 01/06/2020
We have included questions that have been most commonly asked by our clients (SMEs). The full guidance (see below), does cover other areas e.g. public sector.
This guidance will be updated as further information is provided by the government / HMRC.
What is the new flexible furlough leave?
From 1st July
From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week.
The current scheme will close to new entrants from 30 June. The current scheme requires employees to be furloughed for 3 weeks. Therefore, they must be placed on furlough by 10th June, so they can furlough for 3 week period prior to 30 June.
This flexible furlough has been introduced a month earlier than first announced, in order to give businesses more flexibility. Full guidance will be available from 12th June.
|What are the changes to contributions for furlough?|
From August, there will be changes in the contributions and employers will need to start making some contributions.
What about employment law during this period?
Current employment law will continue to apply.
This must be taken into consideration when placing people on furlough leave, in agreements reached when changing terms of employment and all aspects of employment (and any redundancies or short-time/lay-off actioned now or in the future).
Where can I find government guidance?
The latest guidance can be found at: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
The government are also providing videos and webinars: https://www.gov.uk/guidance/help-and-support-if-your-business-is-affected-by-coronavirus-covid-19?utm_source=9da270a9-61a1-4408-bb6c-bfb58daa54a8&utm_medium=email&utm_campaign=govuk-notifications&utm_content=daily
This is a link to the government video on the job retention scheme and SSP:
This is a link to claiming for the Job Retention scheme:
This is a link to the guidance on holidays
Is there guidance from HMRC?
On 15th April, the Treasury issued a Direction to HMRC under powers conferred by the Coronavirus Act 2020, containing authority and instructions for making payments under the Coronavirus Job Retention Scheme.
Amendments are possible, but this will be authority on the scheme regarding payments.
What about guidance for employees?
There is guidance for employees, explaining furlough leaver, that can be accessed here:
What is furloughed leave?
Furloughed leave is the term used to describe a leave of absence under the Job Retention Scheme introduced (for a temporary period) by the government to support business and employment during the coronavirus.
It allows UK employers to access financial support to continue paying part of their employees’ salaries for those employees who would otherwise have been laid off or made redundant during the crisis.
Furloughed leave is just the term used to describe this leave of absence. It is not a legal term in employment law (this may change with future legislation).
How long is furlough leave for / available?
On 12th May 2020 the government extended the job retention scheme (furlough) until the end of October 2020.
Until the end of July, the scheme will continue as currently. However, from August the scheme will be changed to become more flexible and will allow furloughed workers to return part time. Employers will also be asked to share the cost of paying salaries. No detail has been given about this, but the Chancellor stated that further details would be available before the end of May.
Because of the introduction of the new flexible furlough scheme, the current scheme will CLOSE on 30th June (see above) and will be replaced by the new scheme. Further details are expected on 12th June.
Who is eligible?
You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
(This was changed by the government from 28th February on 15th April).
Please note, anyone who joined you in March but was NOT paid until after 19th March will not be covered. This will therefore exclude monthly paid employees whose first payment was after 19th March. It will however capture weekly paid employees who joined from 28th February and were on the payroll before 19th March.
What about anyone who TUPE’d to a new employer after 28th February
On 9th April the government confirmed that employees TUPE’d after 28th February could be furloughed.
What about apprentice?
Yes, you can furlough apprentices like other employees, and they can continue to train whilst furloughed. However, you must pay your apprentice at least the National Minimum Wage for all the time they spend training.
How much can I claim?
Under the Job Retention Scheme the government will reimburse up to 80% of wage costs up to a cap of £2,500 per month.
Grants will cover the lower of 80% of an employee’s regular wage or £2,500 per month PLUS the associated employer NI and minimum automatic enrolment pension contributions.
On 4th April the government changed its guidance to confirm that employer can claim for any regular payments you are obliged to pay your employees including past overtime, and contractual commission payments. However, you cannot claim for discretionary bonuses or commission.
From August, employers will be required to make a contribution. Please see above for details.
Do I have to top up the 80% i.e. pay the other 20%?
No, there is no obligation to do so, but you can if you want to.
Please note that if people are carrying out training while on furloughed leave (see below), you must pay them at least the National Minimum/Living Wage for the hours they are training (see below).
With the new flexible furlough (from July) employers will be required to contribute to the 80%. See above.
How often can I claim?
Government guidance has confirmed that, you will only be able to make one claim during a pay reference period, and this should be made shortly before or during the running of payroll. You must claim for all employees in each period at the same time and you cannot make changes to your claim. Claims can be backdated to 1 March if applicable.
What about zero hours workers or variable hours?
If the employee has been employed for 12 months or more, you can claim the highest of either the a) same month’s earning from the previous year or b) average monthly earnings for the 2019-2020 tax year.
If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.
How do I claim?
HMRC have created a new IT portal to run the scheme, which went live on the 20th April and can be accessed through https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
Is there a limit on how much I can claim?
It is limited by your payroll and how many people you put on furloughed leave (subject to 80% of wage costs up to £2,500).
This will change in August with the introduction of the new flexible furlough scheme (see above for new rates).
How long can I claim for?
On 12th May, the government extended the Job Retention Scheme to the end of October 2020.
Is there a minimum period of furlough leave?
Yes, there is a minimum of 3 weeks. You cannot claim if someone is on furlough leave for less than 3 weeks.
When the new flexible furlough is introduced (1st July), the government have said that “employers will need to report and claim for a minimum period of a week for grants to be calculated accurately across working patterns”. Further details are expected on 12th June. It is not 100% clear if this means that you will be able to furlough someone for just one week.
What do I need to do to put people on Furlough Leave?
You need to designate someone as a ‘furlough workers’ and they will then be put on ‘furlough leave’. During this time, they will continue to be employed by you, but they will not be permitted to work for the period of furlough leave.
You need to notify the employee of this change as it will be a change to their contract. You need to keep records of this.
On 4th April the government guidelines were updated to confirm that employers must confirm in writing to their employee that they have been furloughed and that a record of this communication must be kept for 5 years
On 15th April the government published a Direction to HMRC. This further clarified (at 6.7) that to claim furlough, an employee must be instructed to cease work by the employer (for at least 3 weeks) and that this must be agreed in writing by the employer and employee (this can be electronic e.g. email). It is therefore important that there is a signed agreement with the employee or an email confirming their agreement. This is a change to the original guidance. If you do not have evidence of agreement that includes that they cannot work/must cease work, it would be prudent to gain this from employees.
Can employees work while on furloughed leave?
No. They must not work for the Company while on furloughed leave. But they can volunteer or train (see next question).
On 4th April the government confirmed that an employee on furloughed leave could work for another employer (subject to their contract of employment and agreement from the current employer).
On 9th April the government confirmed that employees cannot work for organisations that are linked to the employer while on furlough leave.
On 12th May the government announced that furlough will become more flexible from August, allowing furloughed employees to return part time. Further details are expected by the end of May.
From 1st July the new flexible furlough scheme will allow employees to be furlough for part of the time (see above).
Can employees train or volunteer while furloughed?
Yes. They can volunteer and can carry out training as long as they do not provide services to or generate revenue for, or on behalf of the company.
Employees must be paid at least east the National Minimum Wage (NMW) if they are carrying out training for any hours, they are training.
Guidance on 4th April stated that ‘furloughed employees should be encouraged to undertake training’.
Do I have to pay at least the NMW when on Furlough Leave?
No. You do not have to pay NMW when on furlough leave (i.e. if the 80% takes them below the NMW this is acceptable). You must pay NMW for any hours of training undertaken while on furlough leave.
Can I put someone on PART Furlough Leave?
No. You have to lay them off completely e.g. you cannot reduce hours and share it amongst all staff. There have been requests to government for a more flexible approach, but currently it is ‘all or nothing’.
On 12th May the government announced that furlough will become more flexible from August, allowing furloughed employees to return part time. Further details are expected by the end of May.
From 1st July, under the new flexible furlough scheme, you will be able to furlough someone part-time (see above).
Can I make someone redundant rather than put them on furlough leave?
Yes. There is no obligation to put someone on furloughed leave. You can make a position redundant. This would normally be where it is clear that you will not have a position for them at the end of this crisis. You must follow a fair redundancy procedure when making redundancies (please take further advice on this) as normal employment law will apply.
However, there may be an argument that you should put them on furlough as an alternative to confirming redundancy under the requirement to consider alternatives to redundancy. You may therefore wish to extend someone’s notice period (if notice would have expired before the end of furlough) and continue to consider alternatives during this time.
This is an unclear area and may only be tested post coronavirus.
Can I consult about redundancies while they are on furlough leave?
On the 30th April the guidance was updated to confirm that union and non-union representatives i.e. employee representatives, could carry out duties relating to consultation (see below).
This confirms therefore that you can consult about redundancies during furlough.
Can employees working as union or non-union representative carry out consultation duties whilst on furlough
On 30th April the guidance was updated to confirm that whilst on furlough, employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers.
However, in doing this, they must not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation.
These duties may include redundancy consultation and accompanying colleagues during disciplinary or grievance meetings.
Can you put someone on notice during furlough leave?
e.g. notice of redundancy or other notice of dismissal?
There is nothing to stop you issuing notice during furlough leave and leaving the employee on furlough leave for the period of their notice (subject to furlough leave still being in place i.e. it is currently to the end of June).
Will notice be paid at 80% or 100%?
There is debate about how much you need to pay someone for notice (i.e. 100% or 80%). This is a technical employment law question. We do however believe that most tribunals would err on the side of the employee and require 100% to be paid. We are therefore recommending that notice is paid at 100% for the period of notice (but you should take further advice on this if you wish to consider paying 80%).
I have a new employee who has just started. Can I put them on furloughed leave?
No. You can only claim for employees who were on your payroll on or before 19th March You cannot claim for anyone who joined after this date.
(employees who may have joined before 19th March but were not paid via your payroll until after this date cannot be furloughed).
Can an employee request furloughed leave?
It is the organisations decision as to whether to designate someone as being on furloughed leave. An employee has no right to be put on furloughed leave (please note that any decisions must not discriminate against employees or workers and must not breach the term of mutual trust and confidence).
Can someone refuse to be put on furlough leave?
Yes. However, if you have a lay-off clause in your contacts of employment you will be able to ‘insist’ on laying them off. The HMRC guidance states that you would not be able to claim for them unless there is written agreement, so you they would only be entitled to any guaranteed payment (£30 per day for 5 days). This is why we believe employees will agree.
If you do NOT have a lay off clause in your contract, then the only other option will be to start a redundancy process. Again, faced with the option of redundancy or furlough, we believe that people will agree to furlough leave in all but exceptional circumstances.
Does holiday accrue during Furlough Leave?
Yes. Holiday entitlement will continue to accrue for employees who are on furlough leave. This was confirmed again on 13th May
Can you take someone off furlough leave and then put them back on if you need them to work for a short while?
Yes (clarified on 4th April) that employees can be furloughed multiple times, subject to each period being for a minimum of 3 weeks. This means you can ‘rotate’ employees on furlough leave if you want to. If you put someone on furlough leave for less than 3 weeks you cannot claim for them.
Can someone take holiday during furlough leave?
Yes. This was confirmed in the government guidance on 13th May
How much must employees be paid for holiday while on Furlough Leave.
Employees should receive 100% of their pay for any days/weeks they are on holiday during furlough leave (i.e. what they would have received if they were taking holiday in normal circumstances). Therefore, if they are taking holiday during furlough, you will need to top up their pay to 100% for the holiday period.
This will include bank holidays if these have been taken as holiday.
This was further confirmed on 13th May (see link to guidance above)
Can you allocate holiday during furlough leave
Yes. This was confirmed in the government guidance on 13th May.
You can allocate holiday, provided you given twice as much notice as the length of the holiday or any other duration that may be stipulated in the employment contract i.e. one month.
How should we treat bank holidays during furlough leave?
If an employee usually works bank holidays, then you can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave, then you would either have to top up their usual holiday pay or give the employee a day of holiday in lieu.
This was confirmed in the guidance on holidays (above) on 13th May.
Does someone get furlough leave if they are self-isolating or off sick?
(see shielding below)
No. Self-isolation or those on sick leave will be covered under sickness absence (SSP and Company sick pay rules). However, after this time they can be furloughed.
On 9th April the government guidance was updated to confirm that if an employee becomes sick during furlough leave, it is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate.
For many employees it will be more beneficial for them to be kept on Furlough leave.
What about those employees shielding?
Anyone who is shielding in line with public health guidance can be placed on furlough leave. https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19
On 9th April the government guidance added that anyone who needs to stay home with someone who is shielding, can be placed on furlough leave.
Can you put directors on Furloughed Leave?
On 4th April the government guidance confirmed that directors can be furloughed if they are on the payroll (PAYE). However, this will apply to salary only. It is not applicable for any dividends.
Where a director is furlough, this should be formally adopted as a decision of the company and noted in the company records and communicated in writing to the director.
Do I pay people on furlough leave through the payroll or wait to receive the grant?
You will still need to run a payroll and issue payslips for people.
If at all possible, you should pay people on the normal payroll date.
If you do not have the funds to pay employees, you may want to talk to your bank about lending. We would recommend that you make what payments you can.
If payments (or part of any payment) must wait until you receive the grant (or bank loan) you must get agreement from employees as this will be a variation in terms of employment (i.e. a change in pay date).
On 9th April the list of information needed to make a claim was updated as follows:
To claim, you will need:
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
If you have fewer than 100 employees on furlough you will be asked to enter details of each employee you are claiming for directly into the system - this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).
If you have 100 or more employees on furlough you will be asked to upload a file with the information rather than input, it directly into the system. The HMRC will accept the following file types: .xls .xlsx .csv .ods
The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).
HMRC retain the right to retrospectively audit all aspects of claims.
The HMRC have confirmed that employers will be able to claim via the new portal from 20th April.
Guidance on how to calculate your employees’ wages/ salary, as well as the Employers National Insurance Contributions and pension contributions for those employees you have furloughed can be found at: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme
What about income tax
HMRC has confirmed that individuals will pay income tax and national insurance contributions (NICs) on any payments received through this scheme as they are replacement for income in line with normal practice for benefits or grants that replace income. The grant will cover associated employer NI and minimum automatic enrolment pension contributions (based on the furlough salary).
Here is the guidance on how to make a clam:
How do I calculate pension and NI?
On 21st April the government updated their calculator. You can find it here:
How much of the grant has to be paid to the employee?
All of the grant must be paid to the employee. The government confirmed on 9th April that NO part of the reclaimed grant can be siphoned off to fund benefits; or for fees, administration charges etc.
This guidance will be updated as required and as there is further guidance provided by government.
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