Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme is now closed.

The information below was last updated on 13th May 2021

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 2020. From then onwards, employer contributions are as follows:

• 1st August 2020 onwards – employers must pay national insurance and pension payments
• 1st September 2020 onwards – employers must also pay 10% of the furloughed employees wages
• 1st October 2020 onwards – employers must also pay 20% of the furloughed employees wages
• 1st November 2020 onwards – employers must pay National Insurance and pension payments only
• 1st July 2021 onwards – employers must also pay 10% of the furloughed employees wages
• 1st August 2021 – 30th September 2021 – 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?

Prior to 31st October 2020, you had to have a PAYE scheme and have the furloughed employees registered on HMRC’s RTI system on or prior to 19th March 2020.

To have any employees on furlough from 1st November 2020 onwards, you must have a PAYE scheme and have the furloughed employees registered on HMRC’s RTI system on or prior to 30th October 2020.

For periods starting 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 between 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 the 2 March 2021 to claim for periods starting on or after 1 May 2021.

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?

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?

The scheme will close at the end of September 2021.

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 for five years.

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 I furlough an employee because she is pregnant?

No. You must not take a decision on whether or not to furlough an employee based on her pregnancy status. Please contact your local HR Dept office for advice on how to support your pregnant employee or how to fairly select employees to furlough if you need to do so.

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. 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 for five years.

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 the end of September 2021.

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

There is no minimum period of furlough leave but claims must be for a 7 day period.

Q. Can I furlough an employee more than once?

Yes, you can agree any working pattern with your employees and claim for unworked hours under the CJRS.

 

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. I am making redundancies, can I furlough my employees for their notice period?

The government have confirmed that no claims will be allowed for employees who are serving a notice period on or after 1st December.

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.

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. Can employees take parental leave whilst on furlough?

Parental leave should be separate to furlough leave so be clear of the reason for the absence in your records.

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. I want my employees to return to work now but there is some resistance because they feel nervous – what can I do?:

– 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 are clinically extremely vulnerable and have a formal shielding notification.

Government advice for clinically extremely vulnerable employees changed on 1 April 2021. These employees can now attend a covid secure workplace.

There is another group of people who are “clinically vulnerable” which includes: those aged over 70, those who are advised to have the flu vaccination for medical reasons annually, those who are pregnant. This group are not required to ‘shield’, but are considered more vulnerable so we advise that you carry out an individual risk assessment to ensure that those people feel as safe as possible at work. We encourage you to take advice from our team of advisors at The Health and Safety Dept.

– 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.

 

Working location

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

Not if they are able to work from home. Since Thursday 5th November 2020, the Government advice is to work from home where possible. If the employee cannot work from home, then they should attend work as normal unless your business has been legally required to close. As an employer, as long as you abide by guidelines to ensure that your employees are protected from Covid-19 transmission, and those guidelines are strictly enforced, then you can ask your employees to attend the workplace where it is not possible to work from home. 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.