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The Furlough Scheme

Apr 30, 2020 | Employment

The Furlough Scheme

Our CEO provides some valuable information on The Furlough Scheme.

The scheme was open to employers on the 20th of April, more than 140,000 applied on the first day. The scheme is designed to support businesses that have been forced to halt operations to do the lockdown. The Coronavirus Job Retention Scheme (or Furlough Scheme) was set up to protect your job if your place of work has been shut down. It will allow your employer to pay you whilst there’s no work to do. This is known as furlough. To be entitled to the payment, you must have been employed on the 19th of March 2020 and be paid PAYE (Pay as you earn).


Who can be furloughed?

You can be furloughed if you’re a casual worker, temporary, zero-hours, agency worker or an apprentice. If you stopped working on or after the 28th of February 2020 you might still be paid if the employer rehires you. The rules now state HMRC will only recognise claims as valid if the employer has advised in writing to the employee. This can be in an electronic form such as an email or letter and will state that the employee will cease all work. The employer should include the date that the employee ceased working and that they expect them to restart their role once the lockdown has ended. Though it needs to be a written record to the employee, the employee themselves do not need to provide a written response. This written record must be retained for five year period.


How much will I get?

Under the scheme, employers can apply for grants that cover 80% of their usual monthly wage costs up to a maximum of £2500 plus the National Insurance payments and pension contributions. Some employers are choosing to top this up to full pay. This scheme will continue until employees can return to work or until the scheme ends (currently 30 June 2020). HMRC will work out each employee’s normal pay for tax, it will be without any bonus or commission. In some cases this may lead to being below minimum wage, this is legal because you are not working. If your pay varies, then they will pay you the higher amount you earned in the same month last year, or the average of the monthly earnings last year. 

Should you find yourself short of money each month, it’s a good idea to have a benefits check. We can carry these out for you over the phone.


Sick or Self Isolating?

There are additional protections in place for those self-isolating or were on sick leave at the start of the lockdown. If you were on sick leave because of self-isolating then you shouldn’t get statutory sick pay. Your employer can still furlough you, if they do, you’ll be eligible for the 80% grant, not statutory sick pay. If you are shielding, speak to your employer about whether they can put you on furlough. Employers can furlough you even if the business isn’t shutting down.


Can I get another job?

People who have more than one employer can receive money in the scheme for each employer. It’s also permissible to work for someone else, whilst on furlough, as long as your contract says that’s okay. If you get a new job, you should make sure you can go back to your employer when that’s over. You can also volunteer.


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