In this page you will find useful links and relevant information about the government's Coronavirus Job Retention Scheme.
Under the new Coronavirus Job Retention Scheme, government grants will cover 80% of the salary of PAYE employees who would otherwise have been laid off during this crisis.
Employers can choose to top up the extra 20% of the employees’ salary, but they do not have to.
Individuals must be on the employer’s PAYE payroll on 19 March 2020 or before but can be engaged on any type of contract including full-time, part-time, employees on agency contracts, and employees on flexible or zero-hours contracts.
- To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming the CJRS. There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years.
- To claim under the scheme employers will need to designate an affected employee as a “furloughed worker” and notify the employee of this change.
- We recommend you take legal/HR advice from one of ACEVO’s corporate partners, if your employees contract of employment does not permit this change in status.
- If the employee’s contract of employment does not permit this change in status, the employer will need to agree on the change with the employee.
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (which is not yet available).
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
- Employees on sick leave or self-isolating cannot be furloughed until after their isolation.
- Employees on maternity or paternity leave cannot be furloughed.
- Furloughed employees are allowed to volunteer, but not for the organisation that furloughed them.
- Statutory Maternity Pay (and related paternity/adoption pay) operates as normal.
- For staff with variable pay, use the previous month the previous year or annual average.
- There is nothing to stop employees being furloughed on rotation.
- Wages of furloughed employees are subject to usual tax and NI.
Supporting furloughed staff
The Directory of Social Change has published a page with suggestions on how you can support furloughed staff. The Heart of the City has also published a guide for supporting furloughed staff, organised in two main topics: the view from HR and the view on mental health.
If you have additional advice, please get in touch and we will include here.
FAQs from furloughed employees
How much will I be paid?
If your monthly gross salary is £3125 or less, you will receive 80% of your salary that you received in February 2020 for each whole month during the period you are furloughed. This calculation will be based on your gross salary, before tax. Any part months will be calculated pro rata, based on the number of days furloughed.
If your monthly gross salary is above £3125, your gross monthly salary will be capped at £2500.
When will I be paid?
You will receive your salary and payslip on the usual payday. Your employer will claim the amount back from the HMRC.
Will I be taxed on my salary?
Yes, tax and other statutory deductions will be calculated in the same way as normal.
What about my pension contributions?
Employer and employee contributions will be based on the 80% salary for the period in which you are furloughed. Note that you have the option to temporarily stop your employee contribution. If you do so you will lose the matching employer contribution.
How long will I be furloughed for?
The government scheme is currently only in place until the end of May. However, they have indicated that it may be extended. We do not know whether that will happen or when we will be notified if it does.
Will I need to do any work for my employer while I am furloughed?
No. Furloughed employees are not allowed to work.
Can I work for another employer whilst I am on furlough from my main employer?
Yes, you can work for another employer if your contract allows you to.
The government’s guidance says that if you are put on furlough you can work for another employer during the furlough but only if your contract allows you to (some employment contracts have exclusivity clause which mean you cannot work for another employer).
Working for this other employer will not affect the grant that the employer who has furloughed you can claim under the scheme.
But you are not allowed to work for an employer or company that is linked to your employer in any way. The work you carry out for the other employer has to be completely separate to the work you normally do.
Bear in mind also that you will need to be able to return to work for the employer that has placed you on furlough if they decide to stop furloughing you. You must also be able to undertake any training your employer requires you to do while on furlough.
Will I lose any annual leave entitlement?
No. You will continue to accrue annual leave at the same rate as if you were working your normal hours.
I’m currently on probation. How does this affect me?
Your probation period will be ‘frozen’ as at the furlough start date. It will then restart from the same point when you are unfurloughed. For example, if you have one month’s probation left to go at the point at which you are furloughed, you will still have one month’s probation period left to run once you are furloughed.
I have a question which has not been answered here.
Please read the government scheme link carefully. If you still think that your question is not answered then please talk to your line manager in the first instance. If they are unable to answer the question, they will raise it with the most appropriate director who will ensure that your question is addressed.