What does Furlough mean?
Employees are effectively laid off for a period of time. They are retained on the payroll system, so employers do not release a P45.
How long does the Scheme last for?
Currently the Scheme lasts from 1 March to 31 May. However, it may be extended beyond that date.
Is there a minimum Furlough period?
Yes, the minimum amount of time an employee can be furloughed is three weeks.
Even though the employee worked in March, can we claim for this period?
No, you can only claim if they were already laid off from 1 March 2020.
How do you claim the 80% back from HMRC?
HMRC will set up a portal, this is automated, however, the portal is not live yet.
What information do you need to make a claim?
You will need your PAYE reference number; the number of employees being furloughed; the claim period (start and end date); amount claimed (per the minimum length of furloughing of 3 weeks); your bank account number and sort code; your contact name; your phone number.
How is this paid?
Directly into the Company bank account via a BACS transfer.
Is it a loan?
No, it’s a grant and does not need to be paid back.
Is it 80% of £2,500?
No, it’s 80% of the employee’s salary up to a maximum of £2,500 per month.
What can the employer claim?
Employers claim for 80% of the employee’s regular wage plus the associated employer NIC and the employers’ pension contribution (auto-enrolment minimum) to enable the employee to retain the whole 80%.
The employee must then receive the whole 80%.
Do employers have to top it up?
No you do not have to top it up.
What is the 80% based on?
For full and part-time employees, the actual salary of the employee as at 28 February 2020 is the salary that should be used.
Those who do not have a full years pay, employers should take an average of pay since they joined the company.
If they joined in February 2020, employers should use a pro-rata rate for this period.
What about those on zero hour contracts?
Employers can claim for the higher of, February 2020 pay or the average of pay for the 2019/20 tax year.
Is overtime and bonuses and commission paid?
No, it’s basic wage.
Do employers pay employees or does the Government pay them?
Employers continue to pay employees via the payroll and then claim the money back.
Do employees still make pension contributions?
If they pay 5% of their current salary, they should pay 5% of their furlough payment.
We recommend that employers not encourage employees to opt-out as this could be unlawful.
If an employee is being paid reduced hours can an employer use this scheme?
No, they may not, employers can only access the Scheme for employees who are not working at all.
An employee has more than one job – can they still be furloughed?
Yes you can, even if they are not furloughed from their other employer.
How do we tell an employee he/she is being Furloughed?
Employers should send employees a letter informing them.
– A template letter is already on the PWA website.
Can Furloughed employees still access and answer emails?
No they may not.
They cannot do any work at all for your company.
They can’t provide services for it or generate revenue for it.
Can Furloughed employees offer to do volunteering or training?
Yes they can volunteer, they may also undertake training.
How does a company pick who should be furloughed if the company wants to keep some employees?
The company could ask for volunteers;
The company could use a selection process in exactly the way a redundancy selection process could work; or if the roles are standalone (as in only one person does and you don’t need it) you can select on that basis.
Are directors eligible?
Currently, if the company is UK registered, the director has an employment agreement and is on the payroll (PAYE), then they should be able to access the Scheme.
Can furloughed employees take holiday?
Holidays accrue at the normal rate during a period of furloughed.
However, once an employee is furloughed, they cannot be on the Scheme and then come off to take holiday (paid at the full rate) and then go back to furloughed.
Can you bring someone back early if business picks up?
Yes you can.
If you bring someone back and business dries up again, can you put them back on furlough?
It is unclear if the Scheme will allow employers to do that. If it does happen it may only allow it to happen once.
Can those on long-term sick be furloughed?
No they cannot.
Deliberately changing someone from long-term sick to furlough so they could access the Scheme would be deemed as fraudulent.
Can those who are self isolating be furloughed?
These employees should be placed on sick leave for the 2 week period and then furloughed after this.
What about those about to go on maternity leave, can they be furloughed?
Yes they can.
We’re in redundancy consultation now, can we furlough those employees?
Yes, this is an alternative to redundancy.
However, if the redundancy is not connected to COVID-19 employers are not under any obligation to furlough the employee as an alternative and it may even be seen as fraudulent to access the scheme if the redundancy is not connected to the virus.
What if those redundancy consultations are connected to COVID-19?
During consultation, employers should consider all alternatives to redundancy.
Employers must consider the option to furlough – if they do not then there could be a risk of unfair dismissal claims.
Can you start redundancy consultation during a furlough period?
It would appear you can, subject to any further guidance on this subject.
If redundancy is confirmed, it is likely employers would have to remove the employee from furlough status and then pay the contractual notice period.
Can you contact employees who are furloughed?
There is nothing to suggest that you cannot, however, you may not ask them to undertake any work.
Ideally employers will use staying in touch calls / emails to check in on wellbeing etc. especially for those currently on their own.