Furlough Q & A

The HMRC portal for the Government’s furlough scheme is due to go live from Monday and payments should be made to employers within four to six days of making claims.

In the last weeks leading up to this the guidance has been updated regularly so it can be hard to keep up with all the changes.

The scheme – officially known as the Coronavirus Job Retention Scheme – is an agreement between the employer and employee and enables businesses to claim grants from the Government that cover 80% of individuals’ pay up to a cap of 2.5K pounds a month rather than making them redundant due to the pandemic.  Furlough pay can fall below the national minimum wage.

Kate Palmer of HR experts Peninsula did a Facebook Live session today going through some of the main issues.

The minimum amount of time to furlough someone is three weeks. The scheme lasts for four months [until the end of June] and may be extended further. Kate Palmer advised employers to check in with employees at the end of the first three weeks to update them. If they need to call someone back in after three weeks they can do. People can be furloughed more than once after they have done the minimum three-week period.

When you are furloughed you cannot work for the company you are being furloughed by. However, you may be able to work for another employer if your contract allows. Directors who are paid via PAYE can furlough themselves, but they need to be careful not to do any work outside of their statutory obligations or they could lose the grant. However, while people cannot work for their employer while on furlough, they can train.

Palmer was asked about annual leave payments during furlough. Annual leave can be taken on furlough, but payment rates are unclear. Palmer said the safest option was to pay annual leave at full salary rate, even if employers can only claim back 80%. Annual leave that has been booked can be enforced by employers if the correct notification is given. You can carry over annual leave for the next two years if you cannot take it this year, for instance, if you are a key worker. Holiday continues to accrue on furlough.

The furlough scheme has recently been extended to cover those who cannot work because no childcare is available. This also includes people who are shielding due to health reasons. You can furlough someone who is shielding regardless of whether they would have been made redundant or not.

Palmer also said that, if employees are on sick or parental leave, they can be furloughed directly afterwards. Statutory pay will continue to be calculated based on average earnings during the eight-week qualifying period [up to the 26th week of pregnancy]. Employers do not have to agree to Keeping in Touch days during furlough.

The cut-off date for rehiring people who have been made redundant and putting them on the furlough scheme has been extended to 19th March from 28th February. It is unclear if people have to be on the payroll by 19th March. Employers do not have to rehire staff if they have been made redundant.

She said that she believes employees from publicly funded organisations cannot be furloughed, but she is checking this. This is because salaries are already being paid by the government.

Other questions covered in the session include bonuses: Palmer said regular payments could form part of salary calculations for furlough so bonuses would need to be regular, expected and embedded in someone’s salary. The guidance was unclear about things like company cars as they are not a payment so it would be down to the employer to decide. Arguably they were not included.

Palmer was also asked about staggering the return of furloughed staff. As long as they were all off for a minimum of three weeks, some could be kept on furlough while others were allowed back – so long as the staggering process was done within the three-month period. Palmer said employers needed to make sure that they are not being discriminatory about who they bring back first.

Since the webinar, Maternity Action has published a letter to the Chancellor calling for the furlough guidance to state explicitly that, if a pregnant woman is unable to be provided with alternative safe work or to work from home, she should be suspended on full pay (in line with existing health & safety law), and the employer can claim support through the CJRS. They have had calls from women working at private care homes and pharmacies who have been told they are not eligible for the scheme.

Self employed people have a similar scheme to the CJRS which also covers March to May.

*Peninsula have a furlough navigator tool on their site to support employers.

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