20 things you need to know about Furlough Leave…
What is Furlough?
Furlough Leave is the commonly used term for the Government’s Coronavirus Job Retention Scheme (CJRS). It was announced on 20th March 2020.
The CJRS allows companies, with employees’ or workers’ written consent, to be temporarily laid off from work, with the Government paying either 80% or £2,500 gross per month of the employee’s, or worker’s salary as of 19th March 2020, whichever is the lower sum (Furlough Pay).
Employers can also recover the minimum auto enrolment pension contributions as well as employer National Insurance contributions, whilst the employee or worker (staff member) is on Furlough Leave (FL).
The main 20 Key Points are that:
- Workers as well as employees can be placed on FL, as long as the worker is an Agency Worker working through an Agency, or a worker on a contract to provide a personal service;
- Either the Employer or the staff member can ask for FL, but staff members and employers need to agree in writing to the staff member going on FL;
- The staff member needs to have been employed on 19th March 2020 and have been part of an RTI submission on or before 19th March 2020;
- FL is currently allowed to be in place until 30th June 2020, but it may be extended;
- Staff members can do no work for their employers during FL, save for training, provided it doesn’t generate income for the employer. Any time spent training must not be paid at less than the National Minimum Wage;
- Staff members can take annual leave whilst on FL;
- Should a staff member be put on FL whilst they are on annual leave, then 100% of their pay is payable by their employer for the period the annual leave covers;
- If staff members are unable to reasonably take holiday because of coronavirus, they will be allowed to carry over up to four weeks annual leave into the next two leave years. (More information can be found in our previous article, here: https://www.tollers.co.uk/employment-update-regarding-changes-to-working-time-regulations-1998-and-carrying-over-annual-leave/);
- If enhanced contractual maternity pay (or similar) is offered (earnings related) to employees, this is included as wage costs that can be claimed through the CJRS;
- Staff members are not eligible for statutory sick pay (SSP) whilst on FL;
- Staff members who are self-isolating or on sick leave cannot start FL until after their period of sickness has finished;
- Shielded employees can be placed on FL;
- FL must last for at least 3 weeks;
- Staff members can be taken off and placed back on FL, as long as each block is at least 3 weeks long;
- Furlough Pay can include contractual commission, but does not include non-monetary benefits, so the value of a benefit like a car etc. and cannot be used to pay benefits;
- Staff members can take out a second job whilst on FL from their employer, as long as that job is not with a “connected or linked organisation”;
- Company Directors can be placed on FL and they can still perform their statutory duties, but not other work for the company;
- Employees who TUPE’d over to a new employer after 19th March 2020 can still be placed on FL, as long as the payroll also transferred over to the new company and was in effect on 19th March 2020;
- Companies that engaged in payroll consolidation schemes after 19th March 2020, because they had multiple payroll schemes in place, can place staff members on FL, as long as the staff members were engaged by the company on 19th March 2020 and they were also on a PAYE payroll on 19th March 2020;
- Employees made redundant after 19th March 2020, due to coronavirus affecting the company, can be asked to be reinstated and be placed on FL.
We’ve answered more of your questions in our Q&A guide, which can be found here: https://www.tollers.co.uk/faqs-on-the-coronavirus-covid-19-job-retention-scheme-the-scheme/. Please note that there may be updates to that article, in this article, as it’s an ever changing area, so this article is more up to date at time of publication.
If you have any questions in regard to this change, to Furlough Leave or any other employment queries talk to Tollers on 01604 258558. We’re here for you.