The information provided by the Government with regard to furlough leave is very sparse. Furlough leave is not currently recognised in law – it’s just a word the Government have used.
Here are a few things we know about the Government’s ‘Coronavirus Job Retention Scheme’:
- All UK employers will have access to financial support to continue paying the salaries for those that otherwise would have been laid off
- Employers will need to designate affected employees as furlough workers and inform them of this change. Changing their status is subject to employment law, and contracts, and so may need to be negotiated
- Employers will need to agree with an employee that they are going to become a furlough worker
- Employers will submit information to HMRC about employees who have been designated as furlough workers, and about their earnings, through an online portal (not yet set up)
- HMRC will reimburse 80% of furlough workers wage costs up to £2,500 per month. It is not yet clear if the maximum wage is £2,500 and 80% of that will be reimbursed, or if £2,500 is the maximum 80% that would be reimbursed
- It appears from the Government Guidance that it may cover pension/NI contributions as well
- Employee guidance: To qualify for the scheme you should not undertake work for your employer while you’re a furlough worker
- Employee guidance: You will remain employed while on furlough leave – your employer can choose to top up the difference in salary but they do not have to
- An employee cannot simply say they are staying at home – furlough leave has to be agreed with the employer
There are many unanswered questions at the moment about who is covered, what arrangements will be put in place and when payments to employers may be made.
We will keep you updated with further information as more Government guidance is released.
Please contact Jane Elgar if you would like more details on how we may be able to help you.