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Coronavirus Job Retention Scheme – Further Government Guidance


On 4 April, the Government updated its guidance on the Coronavirus Job Retention Scheme (Scheme), providing some further clarification for employers about the scope and application of the Scheme.  However, there is still much uncertainty and it is likely that several updates to the guidance will be needed before employers can fully understand all aspects of the operation of the scheme.

Employees who have to stay at home

Employees who are staying at home because they are shielding, or because they are caring for others (such as children) as a result of the pandemic, can be placed on furlough leave.

Alternative work whilst on furlough

The Government has confirmed that employees can undertake alternative work for other employers whilst they are on furlough leave, and that this will not affect their entitlement to a grant under the Scheme.  However, this remains subject to the employment contract – if an employee’s contract prevents them from carrying out alternative paid work, they will still have to seek permission from their employer before they can begin a new role.

Individuals with multiple employers

Employees can be placed on furlough leave by one employer, whilst continuing to work for another.

Staff whose employment has ended

Employers can choose to re-employ and subsequently furlough any members of staff whose employment has come to an end (for any reason) since 28 February 2020. This would  include employees who have been made redundant, as well as those who have resigned.  For employers, that may only be desirable if it considers that they will not have to be dismissed again in the near future.  If re-engaged, an employee may be entitled to retain any statutory redundancy pay already received.

Record keeping

Members of staff must be provided with written notification that they have been placed on furlough leave and employers must retain this documentation for five years.

Who can be furloughed?

There was previously some uncertainty about the eligibility for the Scheme of certain workers and employees. The Government has now confirmed that the following types of employees and workers can be furloughed:

  • Apprentices (who will be permitted to continue the training aspects of their role whilst on furlough, as long as they are paid the applicable minimum or living wage for doing so).
  • Employees of individuals (such as nannies), provided that those employees are paid through PAYE.
  • Agency workers, even if they are employed by umbrella companies. The agency will be responsible for furloughing workers, and agency workers should not carry out any work for the agency whilst on furlough leave, including for the agency’s other clients.
  • Office holders and salaried company directors. During furlough leave company directors  will be permitted to carry out particular duties to fulfil the statutory obligations they owe to their company, provided they do no more than is reasonably necessary to fulfil those obligations. They should not carry out work of a kind that they would undertake “in normal circumstances” in order to generate commercial revenue or provide services to or on behalf of the company.
  • Salaried LLP members.
  • Limb (b) workers i.e. individuals who are not employees but who are paid via PAYE such as zero hours workers.

Any decision to furlough directors or LLP members should be documented as a formal decision of the board or appropriate decision-making body.

Employees on fixed term contracts

When employees on fixed term contracts are placed on furlough leave, their contracts be extended or renewed whilst they are furloughed.  However, where a fixed term contract expires whilst an employee is furloughed, an employer can no longer claim for their wage costs.

Can you furlough an employee more than once?

Employees can be furloughed multiple times, but each separate instance must be for a minimum period of three consecutive weeks.

How will the grant be calculated?

The Government has confirmed that the grant (which, by way of reminder, is for 80% of an employee’s regular monthly wage costs, capped at £2,500) will be calculated based on an employee’s regular contractual pay, such as wages, compulsory commission, and past overtime.  This includes any contractual pay that the employee is receiving while on maternity, adoption, paternity or shared parental leave.  Discretionary commission payments (including tips), bonuses and non-cash benefits in kind will not be included.  The employer can also claim for the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on the wage costs.

The guidance also makes it clear that the cost of any benefits (including any salary sacrifice) should not be included when calculating the level of pay that an employee is entitled to under the Scheme, and that any benefits provided to furloughed employees must be in addition to the wages that are required to be paid under the Scheme.

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