Employed and furloughed: The coronavirus job retention scheme

If your employer is unable to operate or has no work for you because of the coronavirus outbreak, they might be able to keep you on the payroll using the governments job retention scheme. This is known as being furloughed.

Need to know

  • Your employer will receive a grant for 80% of your monthly earnings or £2,500 a month whichever is lower. Fees, commissions and bonuses are not included. So, if you earn £37,500 a year / £3125 a month or above, before tax, you will get the maximum payment of £2,500.
  • The payment will include your employers National Insurance Contributions and minimum automatic enrolment employer pension contributions on that wage.
  • Employers can top up your payment to make up your wages to the full amount you normally receive – but they don’t have to.
  • You will pay tax and national insurance and will continue to have contributions to your employer’s pension scheme deducted (unless you have chosen to opt out).
  • You cannot do any work for the company that furloughed you. But if you have another job, or your contract allows you to take another job, you can continue to work and be paid by another company.

How to claim

  • You and your employer both have to agree to being on the scheme and your employer has to apply. You cannot apply yourself.
  • Any UK employer with a UK bank account whose business has been affected by Coronavirus will be able to claim, but you must have been on your employer’s PAYE payroll on 19 March 2020 or before.
  • Employers were able to start claiming on the 20 April when the scheme went live.
  • Payments will be made until the end of October and can be backdated to 1 March 2020.
  • The scheme will continue in its current form until the end of July, with greater flexibility introduced from the start of August.
  • If you were made redundant after 28 February but before 19 March your employer can agree to re-employ you and place you on furlough instead.

Who can be furloughed

  • You can be on any type of employment contract, including full-time, part-time, fixed-term, flexible or zero-hour contracts. Apprentices can also be furloughed in the same way and can continue to train while furloughed
  • Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’ and therefore employees on all categories of visa can be furloughed.
  • Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed.
  • People in the following ‘non-employee’ groups can also be furloughed including officeholders (such as company directors), salaried members of Limited Liability Partnerships, agency workers (including those employed by umbrella companies), Limb (b) workers providing they are paid through PAYE.
  • If you’re on sick leave or self-isolating because of coronavirus, speak to your employer about whether you’re eligible - you should get Statutory Sick Pay (SSP) while you are on sick leave or self-isolating, but can be furloughed after this.
  • If a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme as long as they intend to keep the business open afterwards.

Useful to know

What will my payment be based on if I work irregular hours?

  • If you have worked for your employer for 12 months or more, you will get the higher of: the average monthly earnings for the 2019/20 tax year OR the same month’s earnings from the previous year.
  • If you have worked for your employer for less than a year, it’s the average of your monthly earnings since you started work
  • If you only started in February 2020 your employer can use a pro-rata amount to work out how much you should be paid.
  • Once agreed, your employer must write to you confirming you have been furloughed otherwise they won’t be eligible to claim.

Holiday and in-work benefits

  • You can’t take paid holiday while you’re furloughed
  • Up to four weeks of paid holiday can be carried over to next year. This extra holiday will have to be used in the next two years.
  • You can still build up your entitlement to paid holiday while you’re furloughed.
  • If you’re planning to take paid parental leave or adoption leave, this will be paid based on your usual earning, not your furloughed rate.

Action to take

  • Speak to your employer if you think your employment will be affected by Covid19
  • Ask them if they intend to put in a claim for the job retention scheme and if you are eligible
  • If your employer won’t furlough you and you can’t go to work or work from home you can contact ACAS at ACAS.org.ukopens in new window.

Did you find this guide helpful?