Furloughing is designed to support firms that have been badly hit by coronavirus, and to prevent mass unemployment. A prime example would be British Airways, who have furloughed more than 30,000 staff (80% of its workforce), following EasyJet which has furloughed just under half its employees.
Furlough is a new type of leave from work which will keep employees on the payroll, rather than being laid off without pay or being made redundant, enabling them to receive 80% of their wages from the employer, as the employer then reclaims the amount from HMRC up to a count of £2500 per month per employee. The employer can choose to top up the salary to 100%, but does not have to. As instructed by the government, employees who are placed on furlough must not work for the employer during that period.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit, in this case be sure to read our article covering ‘Understanding Universal Credit, and how to claim it’.
Which employees can be furloughed?
As detailed by the CIPD, eligible employees must have been on the employer’s PAYE payroll on the 19th March 2020, and includes the following employees:
- agency workers
- zero-hour contract workers
For those who were not on the employer's payroll on the 19th March 2020, or for those on unpaid leave, recently made redundant, are pregnant or on maternity / paternity leave – you can find out if you’re eligible for the scheme on the Government’s website.
The scheme is a temporary measure, which is currently in place for 3 months starting from 1st March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period.
The employees must agree to be furloughed and be in a situation where they would otherwise be dismissed as redundant or laid off by the company due to being unable to operate or have no work to do because of coronavirus (COVID-19).
The scheme aims to support all those through the PAYE system, so casual workers and those on zero hour contracts, who are payed via PAYE scheme (albeit with variable hours) would still be covered.
Which employers can access the scheme?
Any employer (of any size) in the country is eligible, both public and private employers, including local authorities and charities. However, if the workers are self-employed and not on the employers PAYE system then the job retention scheme would not apply to them. There is an equivalent self-employed scheme giving income support to self-employed people.
More information about the Coronavirus Job Retention Scheme is available on the government website and further details are expected in due course. The situation is evolving rapidly, and future regulations and guidance may resolve the remaining uncertainties.
In response to the urgent demand for essential and key workers, and the impact on unemployment due to the coronavirus pandemic, we’ve launched a free service to directly connect individuals with North Wales employers who have urgent jobs to fill and volunteering vacancies to advertise.
If you’ve been impacted by the coronavirus pandemic, and you’re available to volunteer or need paid work, click here.