What does furlough mean?
Furloughing staff means putting them on temporary leave. The Government’s Coronavirus Job Retention Scheme will partially pay salaries of those who cannot work due to the coronavirus crisis, in order to avoid employers making redundancies.
All UK employers will be able to access support to continue paying 80% of the salary of employees not working during this crisis, up to a maximum of £2,500/month. This includes third sector employers.
This scheme will now continue until 31st October 2020 new flexibility will be introduced from August to get employees back to work and boost the economy. No financial limit has been placed on the scheme and it will support as many jobs as necessary. Employers can choose to top up salaries if they wish.
Contractual benefits such as annual leave are unaffected by furlough.
The UK Government website about the scheme is being updated regularly.
How to apply
Employers can now claim for wages through the Coronavirus Job Retention Scheme.
HMRC have produced a step by step guide for employers which explains what information employers will need to provide to make a claim through the Coronavirus Job Retention Scheme (CJRS), this also describes the processes involved. HMRC also have a guide to help employers work out 80% of your employees’ wages to claim through the Coronavirus Job Retention Scheme.
Who is eligible?
HM Revenue and Customs have up to date guidance on eligibility for the Coronavirus Job Retention Scheme and how much you can claim to cover wages for employees on temporary leave (‘furlough’) due to coronavirus (COVID-19).
Who is not eligible?
Employees who were not on the employer’s PAYE scheme on 19 March and who were not notified to HMRC on an RTI (Real Time Information) submission on or before 19 March 2020.
Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.
Any employee who is doing, and will continue to do, work which generates income or provides services for the organisation – even if their hours and/or pay have been reduced, or is provided on an unpaid basis.
Employees cannot be furloughed for part of their time. They are either furloughed or they are working.
Public sector funding
Guidance on the scheme states that: “[w]here employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them”.
Many voluntary organisations receive a mix of funding, including public funding. The guidance does not provide a definitive answer in how to furlough staff when an organisation receives a mix of funding from public and other sources (e.g. trading). However, our understanding is that:
- Organisations should not furlough staff that are specifically associated with a grant or contract that is still being paid
- Organisations with mixed funding can furlough staff that are not funded by the public sector, or where the majority of funding / income for the position is no longer available
The person ultimately responsible for your organisation’s finances should be confident that claiming for furlough through HMRC cannot be considered to be double claiming for costs paid for from other public sector funds.
We will update this page if there is any further clarification to the guidance.
Can staff volunteer while furloughed?
A furloughed employee can take part in volunteer work while furloughed, but not for the organisation they work for.
Can staff take part in training while furloughed?
Yes, staff can be encouraged to take part in training while furloughed.
However, the training cannot result in the individual providing services to, or generate revenue for, or on behalf of their organisation.
Furlough because of caring / shielding / vulnerability
You can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.
Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.
There is no guidance about how you choose which employees to furlough because of caring responsibilities. If employees are furloughed they cannot work or volunteer for you, but they will still accrue annual leave. Some employers are therefore supporting more flexible working arrangements rather than furlough. This means the organisation must pay salaries, but will still benefit from some of the employee’s time.
Furlough for 20+ employees
If there are more than 20 employees affected, employers will need to consult staff representatives (‘collectively consult’).
Selecting and telling employees
Employers must select employees for furlough in a fair way to avoid any discrimination. They also need to get agreement from the employee to do this, unless it’s covered by a clause in the employment contract. They need to clearly explain how much the employee will get paid in total.
A written agreement should be put in place when employees are furloughed. ACAS recommend the agreement should include:
- the date furlough starts
- how much the person will be paid
- when it will be reviewed
- how to keep in contact during furlough
You can download a template agreement letter from the ACAS website.
Furloughed employees cannot be redeployed to any other role in the organisation. Working employees can be rotated between roles to deploy them where needs are greatest, provided that individual employment contracts and any conditions relating to the funding of specific posts are followed.
Find out more
- There are FAQs at gov.uk and from the CIPD
- ACAS are holding free regular Coronavirus webinars for employers
- Burness Paull, partners in SCVO’s Pro Bono Service, have produced guidance on the Coronavirus Job Retention Scheme.
- Macroberts, also partners in SCVO’s Pro Bono Service, have also produced Coronavirus Job Retention Scheme: your questions answered