We have had a lot of questions from recruiters regarding the government 'Furlough' scheme or Coronavirus Job Retention Scheme (CJRS) as it is officially known. In response, we have put together our current understanding of the situation through answering some FAQ's:
What is CJRS or ‘Furlough’ ?
An employee 'Furlough' is when bosses require their staff to take unpaid leaves of absence. In other words, they'll still technically be employed but won't work or get paid.
The Government has pledged to cover 80 percent of basic salaries up to £2,500 per month, with all employers able to apply to HMRC to pay the wages of people who are furloughed.
The scheme will be open for at least three months starting from 1 March 2020.
Where does the word ‘Furlough’ come from?
The word ‘Furlough’ means ‘to grant a leave of absence’.
It is a term used generally used (up until now) for a leave of absence in the military or government. The term has been applied to US employment law, but not in the UK prior to now.
Which companies can ‘Furlough’ employees?
The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020.
Any UK organisation with employees can apply, including: businesses, charities, recruitment agencies (agency workers paid through PAYE), public authorities.
Who can be ‘Furloughed’?
Any employee who was on PAYE for the company before 28th February 2020.
What is the minimum period that my employer can ‘Furlough’ for?
The minimum period is 3 weeks.
Will I receive my full basic salary and bonus?
Your employer could choose to fund the difference between the government payment and your salary, but does not have to. The payment calculation excludes commission or bonus.
Will I pay tax on the amounts funded/provided to me in Furlough?
Yes, while on furlough, the employee’s wage will be subject to usual income tax and other deductions.
If I was laid off before the ‘Furlough’ scheme was announced, can I be brought back and furloughed?
Yes, the scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
However, your employer would need to be sure that there would be sufficient work for you on your return. It is very much as the employers discretion as they have the choice between redundancy or furlough and therefore the decisions will be on a case by case basis.
Can an employer honour a start date for a new employee who was offered before or since 1st March and put them straight on ‘Furlough’?
No, employees hired (put on PAYE) after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.
The employer could honour the start date and then put the employee on unpaid leave or they can delay the start date of the employee.
Can I work whilst on ‘Furlough’?
No. You cannot work for your current employer or do part time work for another party.
What can I do whilst I am on ‘Furlough’?
Training is currently exempt from the no-work furlough rule in the USA, however we are waiting for guidance on what is allowed and what is not in the UK.
ApsCo advise any ‘work’ activity that can be tracked back to you could put your payments in jeopardy. ‘Work’ is deemed anything that may have a business benefit.
The current consensus is that anything you do whilst furloughed for your own benefit eg training for self-improvement, research on a topic, should be acceptable, but you will need to double check guidelines when they come out.
Most employers will ensure you are removed from their systems (email, CRM etc), but you are kept in touch with through monthly on-line meetings which will ensure you have some contact with the business and your colleagues.
Can I volunteer whilst on ‘Furlough’?
Yes, you can, for anyone other than your employer.
Do I accrue holiday whilst on ‘Furlough’?
Yes, you accrue holiday in the normal way as if you were in the business. However, given the circumstances your employer may ask you to limit the amount you take when you return.
Will I still get commission?
Yes, will be due your commission as if you were in the business. You employer, however, can vary the terms of when they pay out on commission.
Will I still have the same employment rights as before?
Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
We are constantly collating information from our network and advisers on this subject so the above may be subject to change/updates.
If you have a specific question do call us on 07901 977406 and will be do our best to help!
Stay safe and well!