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28.04.20

Furlough – A Summary

2.8 million workers in 387,000 businesses had been furloughed within three days of the scheme opening to applications.

Employers might need to put some or all of their employees on temporary leave (‘furlough’) during the coronavirus pandemic. Furlough is where an employee or worker agrees in writing with their employer that they’re not to work temporarily because of coronavirus.

All non-essential premises must now be closed. This includes:

• Cafés
• cinemas
• clothing shops
• electronics shops
• centres
• pubs
• restaurants
• theatres

 

This might be a difficult time for both employers and staff. It’s a good idea to make sure staff have a way to communicate with the employer and other people they work with.

 

Who can be furloughed

Any of the following can be put on furlough, whether they work full time or part time:

• employees
• workers
• agency workers
• those on zero-hours contracts
• apprentices

 

Employers can also furlough those who are temporarily unable to work because:

• they’re ‘shielding’ (told to stay at home by the NHS because of an underlying health condition)
• someone in their household is shielding
• they have childcare responsibilities
• they’re caring for a vulnerable person in their household

 

Putting staff on furlough

Employers must select people for furlough in a fair way to avoid any discrimination.

They should:

• get agreement in writing and be clear how much the employee or worker will get paid during their furlough
• keep furloughed workers on the employer’s payroll and continue their employment contracts
• make sure furloughs last at least 3 weeks

 

If someone disagrees with their employer’s decision about being selected for furlough or how much they’ll get paid, they should talk to their employer and try to come to an agreement.

 

Furlough agreements

Any furlough agreements should be in writing. It’s a good idea to include:

• the date furlough starts
• how much the furloughed worker will be paid
• when the furlough will be reviewed
• how to keep in contact during furlough

 

Claiming through HMRC’s Coronavirus Job Retention Scheme

Employers can claim for up to 80% or £2,500 of furloughed workers’ wages.

For an employer to claim through the scheme, they must have:

• created and started a PAYE payroll scheme on or before 19 March 2020
• enrolled on PAYE online
• a UK bank account

 

The furloughed worker must have been on their PAYE payroll and included in a ‘Real Time Information’ (RTI) submission to HMRC on or before 19 March.

Claims can be backdated to 1 March 2020.

 

Topping up wages to 100% 

The employer should decide whether they’ll top up furloughed workers’ wages to 100%, but they do not have to. If the employer decides not to top up the wages, they should explain why.

 

Minimum wage during furlough

If furloughed workers are paid 80% of their wages through HMRC’s scheme, this might mean they get less than the minimum wage. This is allowed as long as they’re not working.

But if someone does any training for their job during furlough, they must get the current minimum wage for those hours. For example, if an apprentice continues with their apprenticeship while furloughed.

 

If someone was made redundant or left their job on or after 28 February 2020

An employer can decide to re-employ someone who was made redundant or stopped working for them on or after 28 February 2020, then put them on furlough.

This can be done even if the employer does not employ them again until after 19 March 2020.

The employee must have been:

• on the employer’s PAYE payroll on 28 February
• included in a ‘Real Time Information’ (RTI) submission to HMRC on or before 28 February

 

If you need employment law advice then contact SHU Law’s employment lawyer Mark Serby on 01142255891/ 01142256666 or email enquiries@shulaw.co.uk.