Coronavirus Job Retention Scheme FAQs

When can you furlough a member of staff?
The earliest date is 1 March 2020 and the employee must have been on the payroll on 28 February 2020. Anybody who was on the payroll on 28 February and has since been made redundant can be rehired and put on the scheme.

Your employee must remain furloughed for at least three weeks.

What process do you need to follow to furlough a staff member?
If the workload decreases, employers should identify those jobs affected and discuss furloughing with their staff as an alternative to redundancy. You will need to explain what furloughing means and your employees need to consent to be furloughed. If they agree to become furloughed, it is important that you confirm in writing and that you keep a record of this. If an employee does not consent, you may need to consult over potential redundancy.

If the employee’s contract has a ‘guaranteed pay’ clause, then you need to factor this in as an option. 

Can a furloughed employee do any work while they are furloughed?
You cannot furlough an employee who continues to work for you. However, they can undertake training and do volunteer work, provided they do not provide services to or make any money for their employer.

What is 80% of wages based on? 
Employers can reclaim up to 80% of wage costs up to a cap of £2,500 per month, plus (not including) the associated employer NICs and minimum auto-enrolment pension contributions on that wage. Fees, commissions and bonuses are not included.

The employee will receive the 80% of salary, less tax, national insurance (NI) and employee pension contributions.

Employers can top up the wages to 100% although will only be able to reclaim 80% of wage costs, employers’ NI and pension costs up to the cap.

How is the 80% of wages calculated for a casual worker?
If the employee has been employed for a full 12 months prior to the claim, employers 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 the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro rata calculation for their earnings so far to claim.

How do employers claim?
Claims can be made via an online portal that is expected to be available by the end of April 2020. 

You can only submit one claim at least every three weeks, which is the minimum length for which an employee can be furloughed. Claims can be backdated until 1 March if applicable.

Does a furloughed worker still accrue holiday entitlement?
Yes. The contract continues and a furloughed worker continues to accrue holiday entitlement during the period. 

The government has announced it will allow workers to carry over statutory holiday entitlement into the next two leave years, where it is not reasonably practicable for them to take some, or all, of the holiday they are entitled to due to coronavirus. See the government announcement.

Paying 80% of pay will take wages beneath the statutory minimum wage. Do I need to top this up?
No. Individuals are only entitled to the minimum wage for the hours they work. If they are furloughed and 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working. However, they are entitled to be paid the national minimum wage (NMW) for any time spent training.

Can you furlough people who are already on statutory sick page (SSP)?
Employees on sick pay or who are self-isolating cannot be furloughed. They can agree to be furloughed once they are fit to return to work. Employees who are shielding in line with public health guidance can be placed on furlough.

Can I furlough a member of staff who is on maternity leave?          
No. An employee on maternity leave should continue their leave and pay in accordance with your policies. If there is no work for them to undertake when they return, you should discuss furloughing as an alternative to redundancy. Employers must not discriminate in deciding to whom to offer furloughed status. 

Other sources of information
Guidance for employers is available on GOV.UK. You may also find the guidance for employees helpful.

Read our earlier article about the Coronavirus Job Retention Scheme.