Coronavirus Job Retention Scheme

The information on this page was last updated on Monday 3rd August

Please contact your local HR Dept for advice on furlough and how it might apply to your business.

 

Understanding furlough

Q. What’s the difference between furlough and lay off / short time?

Employers can impose short time working or lay off if they have a clause in the employee’s contract or, in these difficult times, with the employees agreement. The rules around lay off are complicated and allow the employer to give no work to the employee so they are ‘laid off’ for an indefinite period. The employee is entitled to a statutory payment of £30 per day but only for the first five days.

With furlough, the consenting employee can do no work but will receive 80% of their salary which the business can claim back from the Government. Furlough will be a much more attractive proposition to the employee than lay off.

Q. Do I have to pay contributions for furloughed employees?

Currently there is no obligation on you to pay the additional 20% top-up unless that is an express agreement with the employee.

There were no contributions up until 31st July. From then onwards, employer contributions are as follows:

  • 1st August onwards – employers must pay national insurance and pension payments
  • 1st September onwards – employers must also pay 10% of the furloughed employees wages
  • 1st October onwards – employers must also pay 20% of the furloughed employees wages

During this time, employees will not be affected at all – they will always receive 80% of pay when furloughed.

 

Eligibility

Q. How do I know if I am a qualifying employer?

You must have a PAYE scheme and have the furloughed employees registered on HMRC’s RTI system on or prior to 19th March 2020. You may not be an eligible employer if you receive public funding. Please contact your local HR Dept office for advice.

Q. I have just transferred an employee to my company under TUPE, but after 28th February – I need to furlough them, can I?

A new employer is eligible to claim under the Job Retention Scheme in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.

This is a really complicated area of law, so please contact your local HR Dept office for advice on whether or not this applies to your situation.

Q. When does the furlough scheme close?

It closes to new entrants from 30th June. This means that employers can only continue to furlough employees who have already been on a 3 week period of furlough leave prior to 30th June. So for clarity, to be able to take advantage of the furlough scheme on a part-time basis, you must have furloughed your employee no later than 10th June 2020. Unless they are returning from family leave. See below for further information.

The whole scheme is set to finish at the end of October 2020.

Who can be furloughed?

Q. How do I designate employees as furloughed?

You must get the employees agreement and put this in writing, we can guide you through this process and provide templates where appropriate. The agreement must be kept until 30th June 2025.

Q. Can an employee choose to be furloughed on 80%?

No. It is the employer’s decision. We advise to only furlough an employee if this is appropriate for the business, unless an employee’s circumstances could mean that they are entitled to be furloughed under the terms of the scheme. For example, parents with childcare responsibilities who are unable to work because of school closures can be furloughed. Contact us for advice.

Q. If an employee has more than one job, can I furlough them?

Yes you can furlough them for the job they have with you. It’s important you are aware that if you own other companies or your companies are in any way linked (associated companies) then you cannot furlough from one company and allow the employee to continue to work in the other. This is complex, please contact your local HR Dept office for specific advice on this point.

Q. Can an employee return early from maternity leave and benefit from being furloughed?

They would need to give 8 weeks’ notice as per the normal maternity leave rules but could be furloughed on their return to work if the business requires this. Normal maternity rules will still apply.

Q. What about other types of family leave?

Where the leave started before and finished after 10th June, individuals who have returned from family leave as listed below can be eligible for the flexible furlough scheme.

The family leave includes: maternity, paternity, shared parental, adoption, parental, bereavement and unpaid parental leave.

Q. How do we furlough a company director?

Salaried directors can receive support through the scheme and can continue to fulfil duties to their company as set out in the Companies Act 2006. The Board need to decide which directors should be furloughed, and this should be formally adopted as a board resolution with appropriate records made and communicated in writing to the director concerned. The director must sign and return this and it must be kept until 30th June 2025.

Furloughed directors must not do work of a kind that they would carry out in normal circumstances to generate commercial revenue providing services to, for, or on behalf of their company. They are allowed to fulfil their statutory duties.

Q. Can I furlough my nanny and my cleaner?

If you pay them through a HMRC scheme, then yes, you can furlough these domestic employees. Employees in those roles are now able to return to work if they are fit and well, not required to self-isolate and there is no other reason for furlough because of their own circumstances.

 

How long can employees be on furlough?

Q. How long is the scheme open for? 

The scheme is currently open until 31st October 2020.

Q. How long does an employee have to be furloughed for? 

The minimum period of furlough leave is 3 weeks per employee where the furlough period commenced prior to 30th June 2020 and the furlough period is full-time. For part-time furlough rules, please see questions below.

Q. Can I furlough an employee more than once?

Yes, as long as the furlough leave is for a minimum 3-week period prior to 30th June 2020.

Flexible Furlough Scheme

Q. I furloughed an employee for 3 weeks in April, but they are now back at work. Does this mean I cannot part-time furlough that person from 1st July?

As long as the employee was furloughed for a minimum 3-week block prior to 30th June then they are eligible for the flexible furlough scheme.

Q. Is there a minimum number of hours/days that you can part-time furlough someone?

No. There is no minimum period of time. Make sure that whatever you agree is communicated in writing with the employee and that you have evidence of their agreement.

Q. Does the part-time furlough arrangement have to be the same each week? e.g. 5 hours per day instead of 8 every day or can the number of hours change daily or weekly?

No. The working arrangement can be whatever the business needs and in agreement with the employee.

Q. Does the employee have to be on part-time furlough or full furlough for a minimum 3-week period still?

No.

Q. When can we bring furloughed employees back part-time?

From 1st July, you can bring furloughed employees back to work on a part-time basis. This means you pay 100% of their pay for the hours worked but can continue to pay furlough pay for the hours that they don’t.

Q. Is there a different way to make claims when employees are flexibly furloughed?

Yes. The way you make a claim has changed in that claims cannot cross over calendar months – this means that your claim period may not match to your pay period. Your accountant should be able to help you with this.

Rules of activity whilst on furlough

Q. Can an employee work from home and still claim the 80%?

The guidance states that employees must not do any work for their employers whilst furloughed.

You cannot ask your employee to do any work that:

• makes money for your organisation or any organisation linked or associated with your organisation
• provides services for your organisation or any organisation linked or associated with your organsation

Q. Can an employee who is furloughed check emails to just forward on anything that needs doing to their colleagues who are working?

This might be deemed “providing services” so our advice is not to allow your employees to do any work whilst they are furloughed.

Q. Can an employee do volunteering?

Yes, furloughed employees can take part in volunteer work as long as it does not provide services to, or generate revenue for, or on behalf of, your organisation. They are free to volunteer for other organisations or work for other organisations if you agree to it.

Q. We want to provide online training to employees on furlough. Is this allowed?

Yes and it is a good idea to keep staff up-skilled. You must ensure that furloughed employees receive at least National Minimum Wage/ National Living Wage for their time spent training.

Q. I have furloughed an employee but own another company recruiting staff, can they work for my other company?

No. A furloughed employee cannot work for, provide services to generate revenue for an associated employer.

An associated employer is defined clearly in the Corporation Tax Act in section 1122 – we suggest you contact your local HR Dept office or your accountant for advice on this issue.

Q. How do I deal with a situation where a furloughed employee needs to be involved in a disciplinary or grievance process?

ACAS advises that Someone on furlough can take part in a disciplinary or grievance investigation or hearing, including if they:

• are under investigation in a disciplinary procedure
• raised a grievance
• are chairing a disciplinary or grievance hearing
• are taking notes at a hearing or during an investigation interview
• are being interviewed as part of an investigation
• are a witness at a hearing
• are an employee’s companion for a hearing

Gov.uk also states “Employee representatives or union representatives can undertake activities for the purpose of individual or collective representation of employees or other workers.”

Please contact your local HR Dept office before commencing to ensure a fair process.

Q. Can the CJRS grant be used to cover redundancy notice pay?

Contractual or statutory notice pay is a legal entitlement and must be paid in line with the employment contract. If the contract is silent on notice pay, statutory notice pay must be given. The employee can be furloughed during a notice period but their pay must be topped up in line with the employment contract regardless of whether or not the CJRS is claimed.

The rules are clear that the redundancy payment itself cannot be covered by the CJRS grant.

Making a claim under the scheme

Q. How do I claim?

Submit information to HMRC and individuals earnings via the online portal.

The claim process requires essential information to be provided. To save time, we suggest that you read the step by step guidance before starting.

Documentation

Q. What paperwork do I need?

 You must have a written agreement with each individual employee, signed by them confirming that they are furloughed and will not undertake any work for the company. The agreement can be via email.

Q. Do I have to keep documentation about the furlough scheme?

Yes, you must keep the signed agreement to furlough the employee for a minimum period of 5 years until 30th June 2025.

Q. What do I do if my employee does not return the furlough agreement?

As we have to have their agreement in writing you need to inform the employee that they cannot be furloughed and as such you cannot furlough them.

Q. The gov.uk website says that the employee does not need to provide a written response – why are you advising me to get a written agreement from my employee?

The guidance clearly states that CJRS guidance does not over-ride or in any way excuse breaches of employment, equality or discrimination law. Our advice is that this is a temporary change to the employment contract, so it’s advisable to obtain written agreement from the employee to avoid dispute in future. Our role as your HR dept is to prevent people problems.

Managing holiday

Q. I have furloughed employees, can they still take holiday?

Yes, but this must be topped up to 100% of their contractual pay.

Q. Do my employees still accrue holiday during furlough?

Yes.

Q. I don’t want my employees to take holiday when they return from furlough because we will be too busy. Can I cancel pre-booked holidays and decline requests for this reason?

Yes.

Q. I cancelled my employees bank holidays on previous advice that holidays might not be allowed during periods of furlough – what do I do now?

You can insist that employees take holidays during periods of furlough but you must give twice the amount of notice as the holiday you wish them to take. For example, if you want them to use 2 days of their holiday entitlement (as they would have used for the bank holidays) then you can give 4 days’ notice and assign 2 days as ‘holiday’. Remember to pay 100% of their pay, not 80%.

Q. Can employees take parental leave whilst on furlough?

After 1st July, parental leave should be separate to furlough leave so be clear of the reason for the absence in your records.

Q. My employees have their usual summer holidays coming up – can I use the flexible furlough scheme to help me pay for their annual leave?

The wording on the gov.uk site is “The scheme is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy.” Our advice is that if your business is not severely affected, particularly now that you can bring employees back to work on a part-time basis, then you should not use the scheme as this may be perceived as a fraudulent claim by HMRC. Your accountant should be able to help you make this decision.

Sickness and shielding

Q. My employee is currently off sick, can I furlough them?

Yes you can if you have an appropriate business reason – i.e you would be furloughing them if they were fit for work. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.

Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to employers to decide whether to furlough these employees. You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time.

Q. My employee has a letter from Public Health England telling them to shield and that they need to self-isolate for 12 weeks. The Government has said that the shielding period ended on 31st July but my employee doesn’t want to return to work because:

– They don’t feel safe yet

If this is the case then hold a virtual meeting with the employee, talk them through the risk assessment (send them a copy) and all of the measures that you have put in place to protect them and their colleagues. Allow them to ask questions and make suggestions for anything else you could do to ensure they are safe. If after that they still are genuinely worried and don’t want to come to work then, for now, offer unpaid leave. Arrange a time in a couple of weeks to review.

– Their GP says that they are too vulnerable and should stay at home
If they have a fit note from their GP signing them off work then treat that as any other absence. If it is long-term, then you could furlough for this reason for now. Keep checking our website regularly for updates as this may change.

– They just want to be off work for longer but haven’t provided a reason
You could take disciplinary action for unauthorised absence but take our advice first so contact your local HR Dept office.

– They have childcare problems.
If they can’t work from home, then they can be furloughed if their usual childcare is unavailable due to coronavirus related reasons. You should discuss the detail with your employee now that childcare settings, holiday schemes and grandparents can now visit and shielding has ended. It’s unusual that childcare would be an issue.

If they don’t want their children to return to their usual childcare arrangements, then you could offer a period of unpaid leave instead for a short period, but make sure you review it regularly.

Q. Can someone who is shielding return to work on 1st August?

Yes. They must take precautions in the same way as other employees unless they have medical advice to the contrary. As others in the workforce may have returned already, do make sure that you have gone through the return to work plan and safety measures.

Reservists

Q. I have a reservist who has been on active duty and now wants to return to work, but I cannot afford to have them back and all other staff are furloughed – what do I do?

Reservists are exempt from the restrictions applied when the CJRS closed at end of June 2020. This means that you can furlough a Reservist when they return to work or use the flexible furlough scheme without having met the criteria for joining the scheme originally. The specific criteria being that they must have been furloughed for a minimum 3-week block prior to 30th June 2020.

Working location

Q. I would like my employees to return to work in the office now. Am I allowed to ask them to return?

Yes. The Government announced that as of 1st August 2020, it is the employers decision on where their employees work. Working from home is no longer the rule. As long as the employer abides by guidelines to ensure that their employees are protected from Covid-19 transmission, and those guidelines are strictly enforced, then you can insist that your employees return to your premises. Ensure that you do a thorough risk assessment. We recommend you contact The Health and Safety Dept for further advice.

Q. What do I do if my employees don’t want to return to work?

Hold individual meetings with employees who have concerns or problems that prohibit them from returning. It could be any of the following:

  • Worried about contracting/spreading the virus?
  • No childcare?
  • Dependant responsibilities?
  • Anxiety about returning to the office after being at home for so long?
  • Don’t trust colleagues to behave appropriately and maintain social distancing?

The important part here is to take everyone’s concerns seriously, but by discussing them you could reassure them about all of the things that you are doing to make the workplace safe. Consider changing working hours if dependant responsibilities are different now, or think about increasing mental health support – there are so many resources for employers to draw on to support their employees back to work.

Please contact your local HR Dept office for advice so that we can help you navigate these issues and advise you on what to do where you are unable to resolve any of the above.

 

Do you run a business and have a HR question about coronavirus?

The HR Dept provide outsourced HR support to employers. If you are an employee we would suggest that you contact Acas.

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