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Everything you need to know about being furloughed

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01/06/2020
If you’ve been ‘furloughed’ by your company, here’s what it means…

Being furloughed may sound scary, but it’s not necessarily a bad thing as it means you should be able to go back to your job once the coronavirus pandemic is over and things return to normal.

What is ‘being furloughed’?

Under the government’s Coronavirus Job Retention Scheme, employers can keep you on their payroll even if you can’t work because of coronavirus and the government will pay 80% of your pay, up to a monthly maximum of £2,500.

The government will also cover your national insurance contributions and minimum pension contributions.

Under plans to wind down the scheme, employers will have to pay your national insurance contributions and minimum pension contributions from August.

Then from September, you’ll continue to get 80% of your salary but your employer will contribute 10% and the state 70%. In October, your employer will pay 20% and the state will pay 60%.

As of 9 June, 8.9 million people have been furloughed, with employers claiming a total of £19.6bn to support these ‘standby’ workers.

Will I receive my salary from the government?

No, your employer will still pay your salary. They are responsible for claiming through the Job Retention Scheme on your behalf.

When does the scheme start and end?

Applications for the scheme opened on 20 April. HMRC says money should be in employers’ bank accounts within six working days – assuming the application is correct.

The recent changes to the scheme also mean the last date you can be furloughed is 10 June 2020, or you won’t be eligible later on, even though it runs until the end of October for those who’ve previously been furloughed.

Will my company top up my salary?

Your employer can top up the remaining 20% of your salary if they wish but it is not mandatory.

Can I continue to work if I’ve been furloughed?

You are not allowed to undertake work for your employer while on furlough.

However, depending on your contract, you may be able to work elsewhere. Second jobs will not affect your employer’s ability to claim under the government scheme.

From 1 July, you’ll be able to go back to work part-time for your employer. Your employer will be responsible for paying your salary for the hours you work and can furlough you for the remaining hours.

Who can be furloughed?

Anyone who works for an employer with a UK payroll and a UK bank account can be furloughed, as long as they were on their employer’s payroll on or before 19 March (this date was extended from the original 28 February 2020 date).

If you left your job after this date, either because you were made redundant or for a new job, you can be rehired by your old firm and furloughed.

You can be on any type of contract, including a zero-hour contract or a temporary contract and you can be furloughed if you are a foreign national.

The Chancellor confirmed that parents returning to work from paternity and maternity leave in the coming months will also be eligible for the government’s furlough scheme, despite going beyond the 10 June cut-off date for new furlough employees.

How long can I be furloughed for?

The minimum furlough period is three consecutive weeks. The Coronavirus Job Retention Scheme was originally in place for three months starting 1 March 2020, however it has now been extended until the end of October.

However, from 1 July when furloughed employees can come back part-time, when claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week.

Furlough and redundancy

If you’re in redundancy talks with your employer, you could request to be furloughed instead, helping get some money in while you look for a job elsewhere.

However as employer’s will have to pick up an increasing portion of pay over summer, they may decide the redundancy will go ahead. See our ‘I’m about to be made redundant: Can I be furloughed instead?’ guide for more.

Does being on furlough affect benefits?

As being furloughed means a change in your circumstances, a number of benefits can be affected by the amount you earn. The main ones are Universal Credit, Working Tax Credits and Housing Benefit. See our Furlough and benefits guide for more information.

What does furlough mean for my pension?

There is currently no change to the automatic enrolment rules for Defined Contribution pension schemes, the timescales for contribution payments nor any allowances for a payment holiday.

This means unless you are told otherwise, your own pension contributions and your employer’s contribution will continue at the current percentage but will be based on the amount you are paid while on furlough rather than your normal salary. See our Furlough and pension guide for more information.

Furlough and maternity entitlement

Furloughed workers planning to take paid parental or adoption leave (on or after 25 April) will be entitled to pay based on their usual earnings rather than a reduced furloughed rate, the government confirmed. See our Furloughed workers to receive full parental leave pay for more information.

What happens if I’ve booked holiday during furlough?

Annual leave can be taken at the same time as furlough and this means your employer must pay you your standard rate, rather than the reduced rate under the furlough scheme. Whether you are able to cancel or amend your holiday leave is down to individual employers.

The law was recently changed to allow carry over into the next two leave years where it’s not been reasonably practicable to take it in this leave year because of coronavirus. However, this isn’t an automatic entitlement.

Training during furlough

Workers can undertake training and are encouraged to do so as long as they’re not providing any service for the business or generating revenue. Here they’re entitled to be paid at least the national minimum wage for this time which should mostly be covered by the 80% job retention scheme. However, government guidance confirms firms may be required to top-up salaries where wages fall below the minimum requirement.

The government is also offering free online courses to adults at home due to the coronavirus lockdown.

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