Still foggy over Furlough? A Q&A for Employees
- AuthorCatherine Almeida
For any employers or employees who have questions around the furlough scheme we hope you find this Q&A blog helpful. This blog was last updated on the 7th July with the most recent questions added at the end of the article.
Please note the situation is changing regularly.
More Employment & HR blogs on furlough and other topics can be found here.
What is furlough?
In case you missed it, the Coronavirus Job retention Scheme (CJRS) allows employers to put those who were on their PAYE payroll as at the 19 March 2020 (updated date as at 15 April 2020) on a period of leave without work (known as furlough leave) and claim 80% of their wages (subject to a maximum cap of £2500 per month) from the Government as a grant (meaning they do not need to repay it).
The Scheme is designed to help support employers whose operations have been severely affected by coronavirus to help them retain their employees and protect the UK economy. Claims can be backdated to 1 March 2020 (provided employees were not undertaking work at this time) and the application portal opened on 20 April 2020 with the first payments of the grant due 30 April 2020.
The last date an employee could have been entered onto the scheme was the 10th June 2020, however employees who have been on long-term family related leave can be placed on the furlough scheme after the cut-off date. This can only be done if the employer has previously furloughed employees in the company. An agreement must be made between the employer and employee in writing.
Currently, grants can be claimed for a period of furlough up to 30 July 2020 (this was recently extended from June 2020). From August 2020 the government has made amendments to the scheme, with employers being asked to contribute to the cost and we believe with some part-time working being permitted in addition to some furlough leave. It will continue to run in a revised form from August 2020 to the end of October 2020. Guidance is due to be published at the end of May 2020 and we will update this blog as more information becomes available.
Can my employer cut my pay to 80% without consulting me first?
No. Your employer should seek your agreement to cut your pay, this should be in the form of a written agreement. If they don’t it is likely to amount to an unlawful deduction of wages and a breach of contract meaning you would have a legal claim. If you refuse to reduce your pay so that your employer can claim all of your pay through the scheme there is a risk that you will be made redundant or some other clause in your contract will be exercised such as the right to lay-off or short-time working.
Can I decline to be furloughed?
If there is no contractual right to furlough you in your contract of employment then yes you can decline. However, there is a risk that your employer would be forced to make you redundant and/or to exercise some other clause in your contract such as the right to lay off or short-time working (if one exists). At times like these, we would highly recommend flexibility and good communication from both employers and employees.
Can my employer contact me while I am furloughed?
Yes your employer can contact you provided it is not for the purpose of working and or generating any revenue for your employer. For example, your employer could contact you to ask how you are or to let you know when you should return to work.
You can also undertake training for your employer when you are on furlough provided it is not used by your employer to generate an income. For any training you undertake you must be paid at least the National Minimum Wage, which could be less than your usual hourly rate of pay.
How long does furlough last for, can it be extended or withdrawn?
Furlough has to last for a minimum of three weeks for your employer to be able to claim the grant in respect of your wages but it can last longer. You can also be furloughed a number of times so long as each period lasts at least three weeks.
While on furlough will my wages be paid the same way?
Yes, payment should run through the usual payroll. However, your employer can only claim a grant for 80% of your gross wages subject to a maximum of £2500 per month, whichever is the lower.
What happens if I have a period of annual leave during the furlough period?
The current guidance suggests that periods of annual leave should go ahead and payment for annual leave should be paid at the usual rate of pay and not the 80% furlough rate of pay. You can read our blog on annual leave and Covid-19 here.
I was made redundant before furlough was introduced can my old employer furlough me?
On 15 April 2020 the HMRC published its fourth version of the Job Retention Scheme. Provided you were on your employer’s books before 19 March 2020 (i.e. your employer had submitted real time information payroll data by that date) and the employer agrees to take you back on, you can be furloughed. However, your former employer does not have to agree to this.
I started work after 28 February 2020, can I be furloughed?
On 15th April 2020 the HMRC published its fourth version of the Job Retention Scheme. This update changed the qualification date to 19th March 2020 from 28th February 2020. This means that those who were employed and on payroll from THIS date can now be furloughed subject to agreement with the individual. For those employed after this date unfortunately furlough is not applicable to you (unless you TUPE transferred into your new employers employ).
To be clear you have to have been on your employer’s books on or before 19 March 2020 for your employer to claim the grant to cover 80% of your wages (subject to the cap).
Once furloughed can I come back to work and how much notice should be given to me?
Yes, you can return to work following a period of furlough. However, the guidance does not set out how much notice should be given for you to return to work. As you remain employed, you should ensure you are always free to return to work as your employer could require you to return to work at short notice. If you are unable to return due to sickness, self-isolation or shielding you should inform your employer as soon as possible.
Do I need to adhere to the company regulations whilst furloughed e.g. with regards to a social media policy?
Yes you remain employed and you should adhere to company policy and procedure. Your employer could discipline you in the usual way for non-adherence.
Can I take on paid work elsewhere while furloughed?
Yes, you can work elsewhere while on furlough provided the employer is not a linked or associated employer. However, you must check your contract as your employer may have included restrictions within it which forbid your working elsewhere. You must also ensure you are available to return to work for your employer from a period of furlough.
Can I be made redundant after a period of furlough?
Redundancy and furlough are two separate processes. If you have volunteered for furlough this does not put you at increased risk of redundancy.
There is nothing that prevents an employer from making redundancies following furlough. However, employers must comply with law in relation to dismissals for redundancy. Therefore, if you are put at risk of redundancy you should take legal advice.
Can I be furloughed from more than one job?
Yes, you can.
I am a zero hour worker how is 80% of my income calculated?
If you have been engaged for a full 12 months prior to the claim, the employer can claim for the higher of either:
- The same month’s earning from the previous year.
- Average monthly earnings from the 2019-20 tax year.
If you have been employed for less than a year, the employer can claim for an average of your monthly earnings since you started work. For example, if you started work in February 2020, your earnings so far should be pro-rata to establish your furlough pay.
I was made redundant before furlough was introduced can my old employer furlough me?
Yes, provided you were on the employer’s books as at 19 March 2020 and the employer agrees to take you back on. However, your former employer does not have to agree to this.
Will furlough affect annual leave entitlement?
The statutory minimum 5.6 weeks' leave under the Working Time Regulations 1998 continues to accrue during furlough. In relation to additional contractual annual leave, this will depend on what your contract states but it is highly likely to still accrue.
Annual leave can be taken during a period of furlough without breaking the continuity of the three week minimum furlough period. If it has not been reasonably practicable for you to take annual leave due to the coronavirus pandemic you can carry over 4 weeks of annual leave into the next two annual leave years.
Your employer can require you to take annual leave during a period of furlough. However they must take into account whether any restrictions you are under, such as self-isolation, prevent you from resting, relaxing and enjoying leisure time, which is the fundamental purpose of annual leave. They also have to give you at least double the amount of notice of the leave they require you to take e.g. if they want you to take one days leave they must give 2 days’ notice.
Annual leave should be paid at your normal rate of pay if your salary is fixed or should be paid at the rate of your average pay over the last 52 weeks if your hours vary.
If a bank holiday falls inside a period of furlough and you would have usually worked the bank holiday furlough leave is unaffected. If you would have usually have had the bank holiday as annual leave and you are on furlough, there are two options:
- The bank holiday may be taken as annual leave and must be paid at 100% pay for annual leave or
- In agreement with eth employer the leave can deferred until a later date.
I have not been put on furlough leave but some of my colleagues have, is this fair?
It may seem unfair that some employees will be required to continue working potentially increasing the risk of infection if work cannot be carried out from home. However, it is for your employer to decide who should be furloughed. Provided non-discriminatory selection criteria was used it will be difficult for you to challenge their decision.
I cannot work from home and my employer has said I must continue to attend the workplace. Can I insist on being furloughed?
It is understandable that many employees are concerned at present about continuing to attend their workplace due to concerns about the Coronavirus.However, if your employer is continuing to operate and you cannot work from home, you cannot insist your employer places you on furlough leave, it is for the employer to determine whether there is a need to use the scheme.
There has been legislation passed in Wales which makes employers take all reasonable measures to comply with social distancing requirements which should be reassuring for employees across Wales.
If you are concerned about the safety of your workplace, we recommend you take legal advice which is tailored to your individual circumstances as there is legislation in place to protected individuals who are concerned about the safety of the workplace but whether it applies will depend on the facts.
I have received a letter from the Chief Medical Officer advising me to shield, what are my options in regards to working?
If you have this letter you should provide a copy to your employer.If you cannot work from home, the current guidance suggests your employer can offer you a period of furlough leave to assist you in complying with the measures that have been recommended to protect your health during the pandemic.
After my agreed furlough leave is over, can I refuse to return to work?
You should be ready to return to work following a period of furlough. If you have concerns about returning to work you should discuss them with your employer prior to your planned return date. If your employer has made a request for you to return to work following furlough and you refuse to do so you could face disciplinary procedures. If your refusal is linked to concerns over your own health and safety and/or the health and safety of someone else you should take legal advice about your options. If you are unable to return to work because you are unwell you should inform your employer and comply with your employers sickness absence reporting procedures.
Will I still be taxed on my company car as a benefit in kind whilst on furloughed leave?
At JCP we would always recommend speaking to your accountant about anything do so with employee benefits and tax, so we asked Rachael Ball, Associate Tax Director at Baldwins Accountants to answer this question for us. Rachael said:
"Whilst you have your company car, it is available for private use even with the current travel restrictions that we have in place. As such, a benefit in kind for the provision of a company car still exists. What can be done to prevent a BIK arising when a car is not being used? A car has to be unavailable for a minimum period of 30 ‘consecutive’ days to be classed as unavailable to you. The car has to be unavailable to you and not simply a case of you being unable to use the car. HM Revenue & Customs have confirmed that they would accept that a car is unavailable where the keys are kept in the possession of the employer and the employee has no authority to request that the keys are returned to them and are unable to gain access to the car. If you were to send the keys back to your employer until things return to normal and make sure that everything is clearly documented and evidenced should HMRC want to check the circumstances in future, this should be sufficient to reduce the taxable benefit in kind during this period."
In July I will return from 12 months maternity leave, can my employer still furlough me?
If your period of maternity leave started before 10 June 2020 and ended after 10 June 2020 and you were on your employers PAYE payroll on or before 19 March 2020 (an RTI submission must have been made for you on or before this date) your employer can furlough you with your consent and claim a grant under the CJRS.
How will my pay be calculated for furlough when I return form Maternity Leave?
If your pay was fixed prior to maternity leave the guidance states that you employer should calculate your pay by reference to your salary, rather than the pay you received while you were on family-related leave.
If your pay varies, the guidance states that your employer should calculate your pay using either the same month's wages from the previous year, or your average monthly wages for the 2019/2020 tax year, whichever is higher.
My employer has mentioned part-time furlough, what does this mean and is it legal?
From 1 July 2020 employers, with the consent of their employees, are permitted to furlough employees on a part-time basis. For example, if an employer only requires its full time employees for part of the week they are permitted to ask their employees to work to suit its requirement and furlough them for the reminder of the week. Employers can still claim a grant (subject to 80% of wages to a maximum of £2500) and employer NI contributions and pension contributions to pay employees for the time they are on furlough.
There is no limit on the working arrangements that can be agreed and the flexible furlough period can last for any amount of time.
If your employer requires to you work on a part-time basis and be furloughed for rest of the week, you should be paid full pay for the hours/days that you are working and are not on furlough.
Your employer can only put you on flexible furlough if you have been furloughed previously for the minimum period of three weeks before 30 June 2020 (unless you are returning from a long period of statutory family leave, or are a military reservist on a period of mobilisation).
From August 2020 the rules are the same as July. However, employers will not be able to claim a grant for employer NI contributions or pension contributions.
From September 2020 the rules are the same as for August but the amount the employer can claim as a grant for hours not worked is 70% of wages (capped at £2,187.50).
Finally, from October 2020 the rules are the same as for August but the amount the employer can claim as a grant for hours not worked is 60% of wages (capped at £1,875).
For most employers having the option to furlough staff has provided a huge relief during these uncertain times. We cannot stress enough how important it is to communicate, communicate, communicate. Employers and employees alike are finding this a very uncomfortable scenario and whilst the loss of earnings could cause some financial hardship, we would encourage employees where businesses have acted within the law and not discriminated, to support their employers so that they will be able to weather this storm and come out the other side with as minimal impact as possible and with jobs for their workforce in the future.
We hope that these questions have been useful. For straight forward questions we would always recommend consulting the ACAS website here or getting in contact with your local Citizens’ Advice.
To keep up to date with the latest news from JCP Solicitors, including COVID-19 developments relevant to you and your business, please sign up to our mailing list here.