Employer Q&A – updated as of January 2021
What is a ‘furloughed employee’?
Furloughed employees are those whose employers cannot provide work/cover staff costs due to coronavirus, and as such they have been asked to stop working, but have not been made redundant.
The employment status is changed to furloughed.
Who can claim?
All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
if your business is a registered Company or Limited Liability Partnership and you claim under the scheme after the 1st December 2020 your company or LLP name and registered number will be published by H M RC. This means it and will be publicly available that your company has claimed under the scheme.
Which employees can you claim for?
Furloughed employees must have been on your PAYE payroll on 30th October 2020, and can be on any type of contract, including:
• full-time employees
• part-time employees
• employees on agency contracts
• employees on flexible or zero-hour contracts
You do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020. The scheme also covers; employees who were made redundant before 30th October
2020, if they are rehired by their employer.
RTI submission made on or before 19 March 2020, or RTI submission made between 20 March 20 and 30 October 2020.
Who else is eligible?
As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE:
- officeholders (including company directors)
- salaried members of Limited Liability Partnerships (LLPs)
- agency workers
How flexible is furlough?
Employers are free to consider allocating any critical business tasks to staff that are not furloughed.
Employers can furlough employees for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.
Can employees do any work for you whilst on Furlough leave?
To be eligible for the subsidy, when on furlough, an employee cannot undertake work for or on behalf of the organisation. This includes providing services or generating revenue. The following ARE permitted:
• take part in training
• volunteer for another employer or organisation
• work for another employer (if contractually allowed)
Employees cannot work for any period of time that you are claiming furloughed hours. Therefore if you have an employee who normally works 40 hours per week but is flexibly furloughed for 20 hours per week, they can only work in the 20 hours and must not work for the remaining 20 hours you are claiming for.
How much is pay is guaranteed?
From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
For periods from 1 November you will only need to pay for the cost of employer NICs and pension costs.
ls there a deadline for claims
Claims for periods starting on/after 1 November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday.
What happens to other contractual benefits?
All other employment benefits will continue including holiday entitlement.
Note: Where the employee has a work van used for work purposes only, this can be returned to the employer whilst the employee is subject to furlough status.
Do you have to ‘top up’ pay?
No. Some employers may wish to make up the shortfall, while others may not be able to. This just needs to be made clear to all employees concerned.
We recommend that each employer adopts a consistent approach to ALL employees to avoid possible claim of discrimination.
Can an employee undertake training for their employer whilst on furlough leave?
Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation. Furloughed employees should be encouraged to undertake training.
How do you claim?
To claim, you will need:
- your PAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 weeks)
- your bank account number and sort code
- your contact name
- your phone number
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.
There are now time limits for under and over claims of 28 and 90 days respectively.
When will it be paid?
Payment will be made in arrears from 1st November, ie. the employer will have to pay the employee and then reclaim from HMRC within the claim deadline of 14 days.
How do you Furlough an employee?
To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication for 5 years.
It’s also worth noting employees cannot elect to be a furloughed worker without their employer’s agreement but they can request to be furloughed .
What you can claim?
From 1 November 2020, you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
Employees whose pay varies –
If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:
- the same month’s earning from the previous year
- average monthly earnings from the 2019-20 tax year
If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work. If the employee only started work during 2020, calculate prorata for their earnings so far to claim date. The claim period has to be a minimum of 7 days unless it contains the first or last day of the month.
What if the employee is on unpaid leave or Statutory Sick Leave?
Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.
Employers are free to switch employees from sick pay to furlough and vice versa, although this should not be abused by using furlough to ‘top up’ small amounts of SSP for short term absences.
Employees who are shielding in line with public health guidance can be placed on furlough.
Employees with caring responsibilities
Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.
What if an employee has more than one job?
If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
What about staff on or near minimum wage?
Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working.
Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.
Do all workers need to consent or can an employer impose without agreement?
We do not know but best practice is to get employees to agree by sending a letter explaining the situation and ideally getting a signed receipt.
If you are choosing some staff to furlough do you need a fair selection process?
Normal UK Employment laws apply so you are expected to follow a ‘fair’ process.
Employees still have the same rights at work, including:
• Statutory Sick Pay
• maternity and other parental rights
• rights against unfair dismissal
• redundancy payments
Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.
Can a furloughed employee work elsewhere?
YES – But if your contract of employment restricts then your employee may need your permission.
Where 20 or more employees are furloughed do you need to follow collective consultation rules?
YES – Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.
Can furlough employee work from home for their employer?
Does holiday entitlement continue to accrue? And what happens if the employer cannot agree to all holiday requests before the holiday year-end (Working Time Regs)?
YES – Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years.
If an employer wishes to ‘enforce’ holiday they must give double the notice of the intended holiday to the employee. One weeks’ holiday = minimum two weeks’ notice.
Can you claim for employees on statutory notice?
Pre December 1st – Yes
Post 1st December – No
Can employees be furloughed and take holiday leave?
Yes but employer must top up wages to 100% of average earnings.
Other employment issues
Going to work
You may only leave your home for work if you cannot reasonably work from home. Where people cannot work from home – including, but not limited to, people who work in critical national infrastructure, construction, or manufacturing – they should continue to travel to their workplace. This is essential to keeping the country operating and supporting sectors and employers.
Protecting people more at risk from coronavirus
If you are clinically vulnerable, you could be at higher risk of severe illness from coronavirus. There is additional advice for people who are clinically extremely vulnerable to coronavirus. Those who are clinically extremely vulnerable should not attend work. You should only go out for medical appointments, exercise or if it is essential.
Extremely vulnerable employees should receive a letter from their GP/Consultant and can be furloughed.