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Furloughed employees scheme - FAQs

How does the scheme work? What should I expect from my employer? Your questions answered.

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Furloughed employees scheme - FAQs
How does the scheme work?
What are the eligibility criteria?
What other financial support can employers claim?
How should employees be selected for furlough?
What should I expect from my employer?
What is expected of me if I am furloughed?
Should I work while I am furloughed?
Can I do voluntary work and training while furloughed?
I am a GMB rep - can I still do representation while I am furloughed?
How do minimum wage rules apply during furlough?
Can I be furloughed if my company has gone into administration?
What if I have more than one job already?
Can I take on work with a different employer while I am furloughed?
Is the scheme open to public sector organisations, charities, and all industries?
Are agency workers, part-time workers, workers without guaranteed hours of work, and self-employed workers covered by the scheme?
How should payments be calculated?
My pay includes commission and overtime payments – has anything changed?
Can I take annual leave during furlough (and what effect does this have on pay)?
What happens to my pension, national insurance and other employment benefits?
Can my employer make deductions from my wages that are covered by the scheme?
Can my wages be covered if I was made redundant and then rehired?
What if I am on sick leave?
What if I am shielding?
What if I am presently off work sick and receiving Statutory Sick Pay?
Will furlough make a difference to maternity pay?
What if I am returning from statutory leave? Paternity, maternity, bereavement?
If I am receiving Universal Credit, will furlough affect my payments?
Will my employer need to prove that employees have been furloughed?
What if my employer is changing ownership, restructuring or merging? 

Furloughed employees scheme - FAQs

Update: 22/05/20

When employees are stood down from their duties due to coronavirus but remain on the payroll, employers can claim a grant to cover 80% of their wages under the HMRC Coronavirus Job Retention Scheme.

This FAQ is based on the latest official advice. It will be updated as new information becomes available.

This advice is largely based on the minimum standards set out in official guidance. GMB has negotiated agreements to secure enhanced provision for furloughed workers with a number of employers. 

How does the scheme work?


The Coronavirus Job Retention Scheme will operate, in its current form, until 31st July 2020. We are expecting further guidance prior to the end of May 2020 which will set out how the scheme will operate after 1st August and until what is now said to be the end date- 31st October 2020.  

Employers can reclaim wage costs through an HMRC online portal which was activated on 20 April 2020. 

The scheme is designed to keep people in work. Employers can apply for an HMRC grant that covers:  

  • 80% of furloughed employees’ wage costs, up to £2,500 a month  
  • The grant can be backdated to 01 March 2020  
  • Your employer can choose to top-up the remaining 20% of wages  

The Government had said that the scheme will initially be open until the end of June but as we have seen the end date has moved on several occasions and is now said to be the end of October 2020. Claims must be for a minimum of three weeks.  

Your employer must apply for a grant – you cannot apply directly as an employee.  

What are the eligibility criteria?


An employer must have a Pay As You Earn (PAYE) scheme that was created and started on or before 19 March 2020, and have a UK bank account.   

Employees must be paid through a PAYE scheme to be eligible. Employees ‘can not undertake work for or on behalf of their’ employer while they are furloughed.  

Furloughed employees must have been on the payroll on or before 19 March 2020. 

Employees hired after 19 March 2020 ‘cannot be furloughed or claimed for in accordance with this scheme.’  

Employees employed, and on payroll, as of 28th February 2020 but made redundant or who stopped working for the employer after that and prior to 19 March 2020 can also qualify for the scheme if an employer re-employs them and puts them on furlough. 

What other financial support can employers claim?


Small to medium size employers may be eligible for bridging loans under the Coronavirus Business Interruption Loan Scheme, which provides access to loans worth up to £5 million. Eligible businesses must be UK-based, have an annual turnover of no more than £45 million, and meet other eligibility criteria. See here for more information.  

Larger employers may have to meet exceptional costs from reserves or borrowing on commercial rates. The Bank of England has reduced the base rate for borrowing to 0.1% - the lowest rate in history. This should reduce the cost of lending for large employers.  

Employers may be able to reclaim Statutory Sick Pay costs incurred due to coronavirus under the Coronavirus Statutory Sick Pay Rebate Scheme, subject to eligibility requirements. 

How should employees be selected for furlough?


Employees must be formally ‘designated’ for furlough. If only some employees are designated then it is important that decisions are taken in an objective and transparent way.  

GMB would expect good employers to operate a proper process with clear criteria for selection. These could be based on practical grounds, including: a volunteers-first approach, priority for those with long-term underlying health conditions and with family members in vulnerable groups, or other compelling arguments such as people with difficult travel arrangements. 

Rotation of furloughed employees may be one option to prevent unfair and inconsistent treatment between employees who are furloughed and those who are not furloughed.  

Rotation is permissible under the guidelines as long as each block of furlough lasts for at least 3 weeks (21 calendar days).

A proper process should also be followed to ensure that there is no discrimination against people who share protected characteristics under the Equality Act 2010. 

The Advisory, Conciliation and Arbitration Service (ACAS) states that ‘employers must select employees for furlough in a fair way to avoid any discrimination.’ 

What should I expect from my employer?


Furloughing should be by agreement and it should be confirmed to you in writing. The Government’s advice states that: 

‘Both you and your employer must agree to put you on furlough. … Once agreed your employer must write to you confirming you have been furloughed to be eligible to claim.’ 

Your employer must keep a record of this communication for five years. 

If furlough results in a change to your employment contract (for example, if your wages are reduced) then normal employment law applies. This means that furloughing must be done by consent, which may involve collective consultation, unless there is already a clear clause on furlough in your employment contract. Any changes to your contract have to be made in writing 

ACAS guidance states that

‘If an employer cannot reach an agreement [about furlough], they may want to change the written terms in an employee’s contract. 

‘If there are more than 20 employees affected, employers will need to consult staff representatives (‘collectively consult’).’ 

It is very important that any changes to contractual terms and conditions under furlough are temporary and do not continue after the scheme is ended. This means that GMB’s role as a union will be even more important in making sure employees’ rights are protected over the coming months.  

If you require more information, or you are expecting collective consultation to apply, then please contact your GMB branch. 

What is expected of me if I am furloughed?


If you are furloughed then it is important that you do not perform work for your employer – if you do so then your employer’s claim for reimbursement of your wages from the govt.may be invalidated.  

This means that you cannot ‘provide services to or generate revenue for, or on behalf of your organisation’ – or for ‘any linked or associated organisation’ - during the period of furlough.   

If your employer puts pressure on you to work while you are furloughed then please contact your GMB branch.  

Should I work while I am furloughed?

The guidance around the Scheme has always made clear that employees cannot do any work for their own employer whilst furloughed, but it is now confirmed that employees also cannot provide services for or generate revenue for any linked or associated organisation.

This means that your employer cannot transfer you to another company under its control and expect you to work while furloughed. If you are an agency worker, you cannot perform work for companies linked to the employment agency, including its clients. 

Can I do voluntary work and training while furloughed?


You can carry out work-related training or volunteer while you are furloughed subject to public health guidance, as long as you are not making money for your employer or providing services to your employer.  

If training is compulsory then you must be paid at least the National Minimum Wage / National Living Wage, even if this is more than the minimum 80% subsidised rate of pay during furlough. 

All training time undertaken by apprentices must be paid at least the appropriate minimum wage rates.

I am a GMB rep - can I still do representation while I am furloughed?

GMB’s view had always been that our reps could carry on doing the excellent work they do on behalf of our members even where they had been furloughed by their employers. The government has confirmed in its guidance for employees that reps can carry on doing this vital work. 

If you are a rep, you may also be interested in the updated ACAS guidance on disciplinary and grievance hearings updated to deal with our present circumstances.

How do minimum wage rules apply during furlough?


The government’s guidance is that ‘furloughed workers who are not working can be paid the lower of 80% of their salary or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.’

This is on the basis that minimum wage rules are based on hours actually worked.  

There is nothing in the scheme to stop employers making up the difference for minimum wage employees. This is something that could be negotiated by GMB through a collective agreement. 

If you are directed to undergo training while you are furloughed then you must be paid at least minimum wage rates (within your age or apprenticeship band) for that training time.  

GMB believes that it is unacceptable to pay furloughed workers less than the minimum wage, and we are campaigning to overturn this aspect of the scheme.  

Can I be furloughed if my company has gone into administration?

 
Yes – if your employer is in administration, then the administrators can make an application to the Job Retention Scheme. 

The guidance does state that such an application is only expected where there is “ a reasonable likelihood of rehiring the workers. For instance this could be as a result of administration and pursuit of a sale of the business.”

What if I have more than one job already?

 
Each job is treated separately by the furlough scheme. This may mean that you become furloughed in two or more jobs, or that you may be furloughed in one job and not in others.  

Can I take on work with a different employer while I am furloughed?


The guidance confirms that employees can start a new job whilst they are furloughed - but this does have “to be allowed” under existing contract of employment.  

This most probably means that you will need to check your contract and have a discussion with your employer about any new job.

We expect employers - particularly where they have furloughed on the minimum government terms - to allow employees to take up additional work to plug the reduction in wages. 

Is the scheme open to public sector organisations, charities, and all industries?


The Government has said that ‘all UK organisations’ can be covered by the grant from HMRC. A more specific list of eligible organisations includes: 

  • Businesses 

  • Charities 

  • Recruitment Agencies (agency workers paid through PAYE) 

  • Public Authorities 

The Government has said that it expects public employees will only be furloughed in a small number of cases, although GMB expects employers to make the right decision for their employees’ circumstances regardless of sector. 

Are agency workers, part-time workers, workers without guaranteed hours of work, and self-employed workers covered by the scheme?


The government has said that furloughed employees ‘can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts.’

Agency employees are covered by the scheme as long as other criteria are met (such as being paid through a PAYE scheme). If you are an agency worker, the claim should be made by your employer (the agency), rather than the organisation for which you perform work. 

If you are an agency worker and you are furloughed, you should not perform work ‘on behalf’ of that agency, including for the employment agency’s clients. 

Full-time and part-time employees are covered by the scheme.  

Employees without guaranteed hours of employment, including people employed on zero-hours contracts, are covered by the scheme. For more details on how payments will be calculated, see the answer to the question How should payments be calculated? (below)  

Self-employed workers are not covered by the furloughed workers scheme. Equivalent support is expected to be provided through the Government’s Self-employment Income Support Scheme. However, this separate scheme is not expected to be up and running until June. For more information click here

How should payments be calculated?


If you have been employed for one year or more then your employer should claim for 80% of whichever is higher: 

  • The amount you earned in the same month last year, or 

  • The average of your earnings from the last year 

If you have been employed for less than a year then your payment should be based on an average for the months that you have worked in your current job. 

The guidance has recently been updated to include some commission payments, and other forms of payment, in the calculation. Please see the answer to the next question for more detail.

In addition, the cost of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions can be claimed by an employer where they relate to the 80% of wage costs claimed (up to a limit of £2,500 per month). 

My pay includes commission and overtime payments – has anything changed?


Yes! Having previously said that ‘fees, commission and bonuses’ should be excluded from the calculation of what an employer can reclaim from the government, the guidance now says that an employer can claim for ‘any regular payment you are obliged to pay your employees.

This includes wages, past overtime and compulsory commission payments.’  

The guidance goes on to state that discretionary bonus and commission payments and non-cash payments should be excluded – in other words, if any of these form part of your normal wage they may be excluded from the calculations.  

In short: contractual payments (including past overtime payments) are covered by the scheme, non-contractual payments are not covered. 

Remember, however, that the furlough scheme sets a figure and basis for calculation that your employer can reclaim from the government. It does not preclude your employer continuing to pay you as usual during the furlough period. 

 

Can I take annual leave during furlough (and what effect does this have on pay)?

You can take annual leave while you are furloughed. 

The latest official advice clarifies that you should be paid at 100% of your regular wages when you take annual leave – even if you are being paid less than your full wages while you are furloughed. 

If your rate of pay varies then your holiday payment should be calculated on the basis of the average pay you received over the previous 52 weeks. 

It should be noted that, in line with existing rules, employers can restrict when leave can be taken on the basis of the needs of the business. 

If you are unable to take your statutory annual leave entitlement due to coronavirus then you will be able to ‘roll-over’ up to four weeks of leave over the next two years, under a relaxation of normal rules. 

You will continue to accrue annual leave as per your employment contract while you are furloughed. 

See also https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavir...

What happens to my pension, national insurance and other employment benefits?

All of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.

Where an employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Scheme.

Employers still need to pay employer NI and pension contributions on behalf of furloughed employees. Employers cannot claim for additional NI or pension contributions made because they have chosen to top up the employee’s salary or any pension contributions made that are above the mandatory employer contribution.

Can my employer make deductions from my wages that are covered by the scheme?

Can my wages be covered if I was made redundant and then rehired?


Yes, depending on when you were made redundant - the scheme covers employees who were made redundant after 28 February 2020 and then rehired. 

The guidance makes it clear that to employers that ‘if you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme.’ 

If you have been made redundant and you worked for multiple employers over the last year, and you only worked for one employer at a time, then you can only be furloughed by your most recent employer. 

What if I am on sick leave?

Employees currently on sick leave can be furloughed for business reasons. An employee would no longer receive sick pay and would instead be classified as a furloughed employee. This also applies for those on long-term sick (if the employer chooses to do so), and the guidance makes clear that an employer can claim under both the Scheme for such employees and the statutory sick pay (SSP) rebate scheme, but not in respect of the same period.

Employees who become sick whilst furloughed must receive at least SSP. It is up to employers to decide whether to move these employees onto SSP or keep them on furlough, at their furloughed rate.

If a furloughed employee who becomes sick is moved onto SSP, the employer can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to two weeks of SSP if it is Covid-19 related. If employers keep the sick furloughed employee on the furloughed rate, they remain eligible to claim for these costs through the Scheme.

What if I am shielding?

Shielding employees can be furloughed, without the need for them to be specifically at risk of redundancy.

What if I am presently off work sick and receiving Statutory Sick Pay?


Where employees on sick leave or self-isolating, the Government’s advice states that

‘Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.’ The guidance states that the scheme is not intended for short term absences from work due to sickness. 

Employees who are shielding in line with public health guidance can be placed on furlough. 

Will furlough make a difference to maternity pay?


The scheme will not affect your statutory rights. The Government’s advice states that

‘If you are eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and you will be entitled to claim up to 39 weeks of statutory pay or allowance.’ 

‘If you qualify for SMP, you will still be eligible for 90% of your average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of your average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.’ 

If you start furlough and then go on Maternity Leave then this may affect your statutory maternity pay. If you need further advice or support then please contact your GMB branch. 

If you are entitled to enhanced maternity pay then these employer ‘top-up’ payments can be claimed back as part of the HMRC grant under the scheme. The same principle applies to  contractual adoption pay, paternity pay or shared parental pay - that you should continue to be paid at the contractual rate, and the employer can claim it back through the scheme. 

There is nothing in the guidance which says that someone presently on Maternity Leave couldn’t return to work early, and then be furloughed. 

 

What if I am returning from statutory leave? Paternity, maternity, bereavement?

It has helpfully been clarified that pay for employees “returning from” statutory leave (i.e. maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave) will not be adversely impacted. In line with other employees, claims under the Scheme for employees whose period of statutory leave ends after 19 March 2020 should be calculated on their pre-leave salary, not the pay they received whilst on that leave.

Claims for those on variable pay who are returning from statutory leave should be calculated using the higher of: The same month’s earnings from the previous year, or their average monthly earnings for the 2019-2020 tax year.

If I am receiving Universal Credit, will furlough affect my payments?


If you are receiving Universal Credit payments and your income is reduced then furlough may result in changes to your payments. 

One way to assess the potential changes is through the free online calculator run by Policy In Practice (this website contains other information on the social security system during the coronavirus outbreak).

Will my employer need to prove that employees have been furloughed?


The latest Government advice is that an employer ‘can self-certify that it has furloughed employees’ when applying for a grant, suggesting that proof is not required. 

Details of the information that employers will have to provide to HMRC can be found here.

What if my employer is changing ownership, restructuring or merging? 

In TUPE situations, the transferee employer is indeed eligible to claim under the Scheme in respect of the employees of a previous business transferred in after 28 February if either the TUPE or PAYE business succession rules apply to the change in ownership. 

 
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