FAQ

Covid-19: The Coronavirus Job Retention Scheme (Furlough)

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FAQs

Check Answer Updated over a month ago Where can I get information on the latest public health and business advice in relation to COVID-19?
Check Answer Updated over a month ago How can I make my workplace safe during Covid-19?

Government guidance on how to make workplaces Covid-secure (for those businesses who are not required to close and/or who cannot undertake work from home) can be accessed here.

Check Answer Updated over a month ago What are the key developments in relation to furlough from 1 November 2020?
  • Furlough has been extended until the end of September 2021.
  • You can claim the full 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month until 30 June 2021.
  • From 1 July 2021 until 31 July 2021, you can claim 70% of an employee’s usual salary for hours not worked, up to a maximum of £2,187,50 per month.
  • From 1 August util 30 September 2021, you can claim 60% of an employee’s usual salary for hours not worked, up to a maximum of £1,875.
  • If you’re claiming for a period that starts on or after 1 May 2021, you can claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC before 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. You do not need to have previously claimed for an employee before 2 March 2021 to claim for periods starting on or after 1 May 2021.
  • The deadline for making your claim to HMRC for claim periods in April 2021 must be made by 14 May 2021.
  • Employers can furlough employees for any amount of time though the minimum claim period remains as one week (unless you are claiming for the last few or first few days in a month). Claim periods on or after 1 July 2020 must start and end within the same calendar month.
  • Employees can be furloughed for all of their contracted hours, or flexibly furloughed where they work some of their contracted hours each week.
  • There is no maximum number of employees you can claim for from 1 November 2020.
  • Employees must agree to be furloughed, and this must be recorded in writing. The written record must be kept for 5 years. Claim information must be kept for 6 years, however, and so it would be prudent to keep the written furlough agreement alongside this.
  • HMRC will continue to audit claims. With effect from December 2020, HMRC publish employer names for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards.
Check Answer Updated over a month ago Can I furlough staff that have not been furloughed previously?

The furlough rules were tweaked a little towards the end of 2020 and a member of staff does not need to have been furloughed the first time round to be eligible to be furloughed now. However, employers can only claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC before 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee.

It is important to remember that, in all cases, employers need a written agreement in advance of a period of furlough, to furlough and submit a claim under the current furlough scheme rules.

Check Answer Updated over a month ago What is the position regarding employees who have transferred to our employment under TUPE?

For claim periods after 1 January 2021, a new employer is eligible to claim in respect of the employees of a previous business transferred if the TUPE or PAYE business succession rules apply to the change in ownership.

The employees being claimed for should have:

  • been employed by their new or prior employer on or before 2 March 2021; and
  • transferred from them to their new employer on or after 1 January 2021; and
  • transferred from them to their new employer on or after 1 January 2021; and.
Check Answer Updated over a month ago What is the difference between furlough and flexible furlough?

Fully furloughed employees are those who are furloughed for all of their contracted hours of work each week. They cannot undertake any work for you while furloughed full time.

Flexibly furloughed employees can work for any amount of time, and any work pattern but they cannot do any work for you during hours that you record them as being on furlough.

Check Answer Updated over a month ago Do we have to furlough all employees?

No. It is for you to determine which employees you will furlough. If you are not furloughing all employees, you should ensure that you select employees for furlough fairly and free from discrimination. It is also permissible to rotate staff on furlough.

Check Answer Updated over a month ago How much exactly can we claim?

You will need to calculate the amount you are claiming in respect of each furloughed employee. The government guidance links above provide helpful examples to assist you in doing so. The payment reference period will be determined by the “employee’s reference date” which can be determined by reviewing the government guidance here.

Check Answer Updated over a month ago What should we pay a furloughed employee?

You may agree to pay them only the sums reimbursed by HMRC or you may agree to top up their payments. It does not matter if furlough pay takes an employee below the minimum wage, since the employee is not carrying out work (although see below regarding time spent training).

Check Answer Updated over a month ago Can we claim for reimbursement of salary sacrifice benefits or benefits in kind during furlough?

The reference salary for a claim should not include the cost of non-monetary benefits, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary.

Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits must be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

Check Answer Updated over a month ago If an employee is working their notice period, can they be furloughed?

With effect from 1 December 2020, an employer can no longer claim in respect of an employee who is serving out any sort of notice period, whether contractual or statutory.

Check Answer Updated over a month ago Can someone who is off sick be furloughed?

If your employee is on sick leave or self-isolating as a result of coronavirus, they would be entitled to receive SSP if eligible.

The guidance makes it clear that furlough is not intended for short-term absences from work due to sickness and that short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee.

However, the guidance also indicates that if employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.

Our view is that if an employee is long-term absent from work, it would be acceptable to place them on furlough with their agreement, if you wish.

However, for employees who are short-term absent, our view is that they should only be furloughed once they are fit to return to work.

Check Answer Updated over a month ago What if an employee is furloughed during their probationary period? Should I extend their probation?

You are not obliged to do so, but this would be sensible. This should be communicated to the employee prior to the date on which their probationary period is due to end.

Check Answer Updated over a month ago What if an employee becomes sick whilst on furlough?

An employee who has a contractual entitlement to company sick pay and who becomes sick whilst on furlough may prefer to be placed onto sick leave, so to receive company sick pay, if this is more generous than furlough pay. This would require them to report their sickness to you.

For employees who are entitled to SSP only, if they become unwell whilst on furlough, they must be paid at least SSP. It is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate.

If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to two weeks of SSP if the sickness is related to coronavirus.

If employers keep the sick furloughed employee on the furloughed rate for the period that they are sick, they remain eligible to claim for these costs through the furloughed scheme.

Check Answer Updated over a month ago Can I furlough an employee who is “shielding” in line with government advice?

Yes. Employers can furlough employees who are clinically extremely vulnerable, at the highest risk of severe illness from coronavirus or off on long-term sick leave. It is up to employers to decide whether to furlough these employees. If you do not furlough such employees, they would receive SSP only.

Check Answer Updated over a month ago Can an employee return from maternity leave early in order to be furloughed?

Yes, however they will need to give you at least 8 weeks’ notice of their return to work and you will not be able to furlough them until the end of the 8 weeks.

Check Answer Updated over a month ago Does a furloughed employee still pay tax on their earnings?

Yes, and deductions should therefore continue to be made as normal.

Check Answer Updated over a month ago Can a furloughed employee continue to carry out some of their duties from home?

No. A furloughed employee must not carry out any work, even from home. They can take part in volunteer work or training, if that work does not provide services to, or generate revenue for, your organisation.

Check Answer Updated over a month ago Can a furloughed employee work elsewhere?

Yes, this is permitted, regardless of whether it is a new second job, or a job they already had prior to the start of the furlough scheme (although we should confirm that the employee could not work for an associated employer in these circumstances). You should clarify to employees if you want them to get permission from you before starting another job while furloughed, and it would be reasonable to reserve the power to say no if the job would conflict with the interests of your own business.

Check Answer Updated over a month ago Can I employ an individual who is on furlough with another employer?

Yes, this is permitted, however you should ensure that you complete the PAYE starter checklist form correctly. If an employee is furloughed from another employment, you should complete Statement C of https://www.gov.uk/government/publications/paye-starter-checklist

Check Answer Updated over a month ago Can I bring a furloughed employee back to work and then ‘re-furlough’ them?

Yes, employees may be furloughed multiple times. You can also move an employee from full-time furlough to flexible furlough, and vice versa.

Check Answer Updated over a month ago Can an employee request to be furloughed?

Yes, however they cannot insist on this. It is for the employer and employee to agree if the employee will be furloughed.

Check Answer Updated over a month ago Can a furloughed employee take annual leave during their furlough period?

Yes, this is possible. However, whether you are topping up the furlough payments to the employee or not, they should receive full pay (as they normally would) for any period of annual leave.

The updated guidance states that employees on flexible furlough should have any holidays taken treated as furlough hours rather than working hours.

Check Answer Updated over a month ago We are going through redundancy consultation at present. Should we consider pausing the consultation and using the furlough scheme instead?

You should certainly consider whether furlough provides a viable alternative to redundancy at this time but, if it does not, it would be sensible to continue with your redundancy consultation process.

Importantly, you can have employees on furlough whilst going through the redundancy consultation. This may afford you extra time to look for alternatives to a redundancy dismissal, which is something you must do as part of your redundancy consultation process.

Check Answer Updated over a month ago What would we need to do to put our redundancy consultation process on hold, if we chose to furlough employees instead?

Yes, you can do so with the agreement of the employees involved. You can propose to them that the redundancy consultation process will be paused for the time being and the affected employees will be placed on furlough until a date to be agreed. You may need to restart redundancy consultation from scratch at the time the furlough scheme ends if you still need to make redundancies then.

If you have already issued an employee with notice of redundancy and you wish to revoke that notice and place the employee back on furlough, you can only do so with the employee’s specific agreement. The employee can insist on receiving their redundancy payment rather than being re-furloughed, if they are so inclined. However, their employment would terminate in these circumstances, when the notice period expires. If you do agree with the employee to revoke their notice, you would have to start the process of making them redundant afresh if that remained necessary at the end of furlough. Also, you would have to make your selections for redundancy afresh in that scenario – you could not simply say that because a particular employee was selected for redundancy the first time round, it would automatically be the same person selected for redundancy the second time round.

Check Answer Updated over a month ago Can we still claim a Job Retention Bonus in relation to employees who continue to be employed after furlough?

The Job Retention Bonus was intended to be a one-off taxable payment of £1,000 which employers could claim for all employees who had been furloughed and remained continuously employed through to 31 January 2021, providing they met additional criteria regarding the pay received between the end of furlough and the end of January.

With the extended furlough scheme in operation until the end of September 2021, the Job Retention Bonus is no longer available, although the Government has indicated that it may be reinstated following the end of the now extended furlough.

To download full document Coronavirus (Furlough).

 

 The information was accurate as at May 2021 when this resource was written by our team of employment solicitors.

 

The information provided in this document is intended as general guidance only. The information is not intended to constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances. Just Employment Law Ltd shall accept no responsibility for any loss which may arise from reliance on the information in this document.

Just Employment Law Ltd retains copyright in this document and it may not be reproduced or shared. Permission must be sought from, and granted by, Just Employment Law Ltd before this material may be used for any other purpose.

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