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Coronavirus Guidance - Job Retention Scheme

The Government guidance for employers on the Job Retention Scheme has been updated as of 15 April 2020. Eligibility for the Scheme has changed and the key date for eligibility is now 19 March 2020 instead of 28 February 2020.

The guidance lists the following:

  • To be eligible to claim for the Government grant, organisations must have created and started a PAYE payroll scheme on or before 19 March 2020, enrolled for PAYE online and have a UK bank account.
  • Employees must have been on the organisation’s payroll on or before 19 March 2020 and have been notified to HMRC via a RTI submission on or before 19 March 2020. This is aimed at capturing more employees within the Scheme.. This now means that more new starters can be furloughed and claimed for — capturing anyone who joined after 28 February up to and including 19 March
  • Employees that were on the payroll on 28 February 2020 but then left before 19 March 2020 can also qualify for the Scheme if the organisation re-employs them and puts them on furlough
  • Under a TUPE transfer, the transferee can claim for employees transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.
  • Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 19 March 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the Scheme.
  • For fixed salary earners, organisations will claim for 80% of the employee’s salary as in their last pay period prior to 19 March 2020. If, based on previous guidance, the organisation has calculated the claim based on the employee’s salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020), they can choose to still use this calculation for their first claim.

Furlough and the Job Retention Scheme Q&As

With the Government introducing plans for financial assistance to provide employers an alternative to redundancies, here are some FAQs on furlough and the Government’s Job Retention Scheme.

What is the Job Retention Scheme?

By designating employees as “furloughed”, you will be able to recover 80% of your wage costs through the Job Retention Scheme. This means that your furloughed employees will still receive at least 80% of their wages, even though they are not carrying out any work. It is a way of avoiding unpaid lay off or redundancy and allows you to keep employees on until you can provide work again.

What is a “furloughed” employee?

The word furlough generally means a temporary leave of absence from work. A furloughed employee is someone who, rather than being dismissed for redundancy by their employer or being put on lay off, is kept on the payroll during a period where the employer cannot offer any work for them.

Do I need to get employees to agree to the furlough?

Unless there is a term allowing furlough in employees’ contracts, you will need to obtain agreement from employees to designate them as furloughed and reduce their pay (if that is what you want to do — you may decide to furlough and keep on 100% pay by topping up the Government grant).

You will need to agree the pay reduction with employees as part of the agreement to furlough, because normal employment law principles apply.

On 15 April 2020, the Government released a Treasury Direction on the Scheme. It stated that employers must have agreement in writing that the employee will cease to do all work for the duration of furlough.

Employers should confirm the employees' new status and obtain their consent in writing, including confirmation that the employee will cease all work in relation to their employment. Records should be kept for five years.

Do I have to collectively consult if 20 or more employees are involved?

Possibly. If there is a pre-existing consultation process in place, you may have to follow it. If there is no consultation process in place and to begin consultation on this would present difficulties with the election of representatives and actually fulfilling consultation, there may be a defence because of the special circumstances. In all but the most extreme cases, there is likely to be an expectation that some form of consultation is undertaken.

Who will the Scheme apply to?

The Scheme is open to all UK employers that had a PAYE scheme in place on 19 March 2020, is enrolled for PAYE online and has a UK bank account. Any organisation with employees can apply, including charities, not for profit organisations and recruitment agencies.

While the Government has said they do not expect many public sector employers to furlough employees, there is no complete bar on this. The guidance says “In a small number of cases, for example where organisations are not primarily funded by the Government and whose staff cannot be redeployed to assist with the coronavirus response, the Scheme may be appropriate for some staff.”

What’s the specific position on early years, education and children’s social care?

On 17 April 2020, guidance was released which deals specifically with early years, children’s social care and education. There are various types of support open to these industries. However, the Government expects that all relevant organisations should first consider any potential options to reduce their operating cost and secure commercial loans eg. Business Interruption Loans, before seeking to use the Coronavirus Job Retention Scheme or seeking specific support from the Department for Education (DfE).

Educational settings that are in receipt of some public funding should only furlough employees if they meet the following conditions:

  • the employee works in an area of business where services are temporarily not required and where their salary is not covered by public funding
  • the employee would otherwise be made redundant or laid off
  • the employee is not involved in delivering provision that has already been funded
  • (where appropriate) the employee is not required to deliver provision for a child of a critical worker and/or vulnerable child
  • the grant from the Coronavirus Job Retention Scheme would not lead to financial reserves being created.

The Government is developing an online tool that will support the education, early years, and children’s social care sectors, in working through this guidance, and understanding the different funding and financial measures available to support them, and their workforce, through this period of disruption caused by coronavirus.

Below is some more specific guidance per sector.

Early years providers

On 17 March 2020, the Chancellor confirmed that the government will continue to pay local authorities for free early years entitlement places for 2, 3 and 4 year olds to support providers at this time.

A private provider should only furlough employees, and therefore seek support through the Coronavirus Job Retention Scheme, if they meet the conditions set out above.

If it is difficult to distinguish whether staff are funded through free entitlement or private income for the purposes of meeting the first three conditions, then an early years provider can access the JRS to cover up to the proportion of its paybill which could be considered to have been paid for from that provider’s private income. This would typically be income received from ‘parent-paid’ hours, and excludes all income from the government’s free entitlements (or ‘DSG income’) for all age groups. In line with the conditions of the scheme, providers should initially use the month of February 2020 to represent their usual income in calculating the proportion of its paybill eligible to be covered by the scheme. Providers should adjust these proportions in subsequent furloughing applications if their income from the Government’s free entitlements changes, but are not expected to make any adjustments in relation to changes in parent-paid income.


If a provider’s average monthly income is 40% from DSG and 60% from other income, the provider could claim CJRS support for up to 60% of their paybill.

This would be done by furloughing staff whose usual salary/combined salaries come to no greater than 60% of the provider’s total paybill.

These proportions could change in subsequent furlough applications as a result of Dedicated Schools Grant (DSG) income changing (but not where income from parents increased or decreased). For example, if this provider subsequently receives additional DSG income from a local authority as a result of providing additional hours of childcare, such that its new DSG income would represent 55% of its total income in February 2020, then its maximum use of the furlough scheme should, from that point, be reduced to 45% of its paybill.

Children’s social care

As placements will continue to be needed, local authorities will continue to pay fees to children’s social care providers so the Government would expect providers not to furlough staff.

In the rare circumstances that providers feel they have no choice but to furlough staff, they should only seek support through the Scheme if they meet the conditions above.

Funding for residential care will continue.

Mainstream state-funded schools

The Government do not, in general, expect schools to furlough staff. However, schools may have a separate private income stream (for example, catering, sports facilities lettings, or boarding provision funded by parents in state boarding schools). Where this income has either stopped or been reduced and there are staff that are typically paid from those private income streams, it may be appropriate to furlough staff. Schools should first seek to make the necessary savings from their existing budget or consider options to redeploy these staff before furloughing them. Only after all other potential options have been fully considered should schools furlough those members of staff and seek support through the Scheme subject to 5 point criteria above.

Where these conditions are met, schools should receive a grant from the CJRS which is in line with the proportion of its paybill which could be considered to have been funded by a school’s private income.


If a school’s average monthly private income stream (for example, from parent-paid school meals) provides 4% of the schools’ overall income, the school could claim support through the CJRS for up to 4% of its paybill, after exhausting options to meet costs from existing budgets and redeployment. This would be done by furloughing staff (for example, catering staff) whose usual salary or combined salaries are linked with the income lost and come to no greater than 4% of the provider’s total paybill.

Schools are not expected to consider each stream of private income separately so a school should consider its total income from private sources, as a proportion of its overall income, and the pay of all the staff it proposes to furlough, as a proportion of its total paybill.

Supply teachers and other contingent workers in state-funded schools.

Where schools are the workers’ direct employer

Schools will continue to receive their budgets for the coming year as usual, regardless of any periods of partial or complete closure. This will ensure that they are able to continue to pay for staff and meet their other regular financial commitments.

The Government expects schools to ensure any employees funded by public money continue to be paid in the usual fashion from their existing staff budgets, and not furloughed.

Where schools have live assignments with contingent workers, and where the school is the workers’ employer, schools should continue to pay these workers from their existing school budgets and not furlough them.

Where schools have terminated contracts with contingent workers due to coronavirus earlier than the original terms set out, and where the school was the workers’ employer under that contract, schools should reinstate these contracts on the terms previously agreed, as long as the contractor is not already accessing alternative support through another government support scheme.

Where schools are not the workers’ direct employer

Schools are advised to refer to all parts of the Procurement Policy Note 02/20 (PPN 02/20), which provides guidance for public bodies on payment of their suppliers for the purposes of ensuring the continuity of critical service during and after the coronavirus (COVID-19) outbreak.

Where schools have agency workers on live assignments who can continue to work, they may continue to make previously agreed payments for the supply of workers in line with the approach set out in PPN 02/20. Agencies who receive money for workers in line with this guidance should not furlough these workers, and should follow the open book accounting rules set out in PPN 02/20 to provide schools with proof that workers are continuing to be paid as normal.

Where schools have agency workers on live assignments who cannot continue to work due to coronavirus (COVID-19), schools and agencies should refer to the guidance set out in Procurement Policy Note 02/20: Contingent Workers Impacted by COVID-19.

The supplier relief guidance covers the length of existing live assignments up to the end date that had been previously agreed. It does not require these assignments to be extended further if the resource will not be required.

Where agency workers are not on live assignments with schools, or where a previously agreed assignment is due to end, schools and agencies should discuss any further demand for the worker. If there is no further demand, the employer can apply to furlough the worker via the Scheme. Once a worker has been furloughed, they become unavailable to work and cannot provide services for their employer for a minimum of 3 weeks. Schools and agencies should bear this in mind when discussing ongoing resource requirements and agencies should keep this under regular review. Please refer to the supplier relief guidance for more information.

High needs funding

High needs funding will continue to be paid to the following types of setting, whether from local or central government:

  • local authority-maintained schools (mainstream, special and pupil referral units)
  • academies and free schools (mainstream, special and alternative provision)
  • non-maintained special schools
  • independent schools, including independent special schools
  • independent alternative provision
  • high needs places in further education (FE) colleges and sixth form college
  • special post-16 providers
  • hospital schools

Teaching and non-teaching staff (administration, operations, maintenance and catering) should not be furloughed where they are funded from continued high needs funding, and where necessary and feasible, should be available for redeployment within settings and in other settings to assist in maintaining provision for vulnerable children and young people, and the children of critical workers.

State-funded residential special provision is delivered in various types of setting, including state-maintained schools, non-maintained special schools, independent schools and special post 16 institutions. While the educational costs will continue to be funded from the DSG, the residential costs are met from social care budgets. Local authorities will continue to receive funding for social care provision and should continue to pay residential costs so that the employment and payment of staff supporting children and young people who require residential provision can continue.

As with colleges, special post-16 institutions may rely on non-grant income for young people with EHC plans.If such income has ceased or reduced, it may be appropriate for special post-16 institutions to seek support from the Scheme to furlough staff who are working on activities relating to those non-grant income streams.

Independent schools

Mainstream independent schools

Independent schools have been asked to remain open for the children of critical workers and the most vulnerable children. Independent schools are, in general, funded by fee income paid by parents. Since schools have closed to the majority of pupils, they, like other businesses, may be facing a sudden and substantial loss of income. These institutions should access support schemes in order to retain staff and enable the school to reopen fully in due course.

However, if there are any activities for which schools continue to receive public funding, such as looked after children placed by a local authority, or local authority support for pupils with EHC plans, the Government expects schools to use that money to continue to pay those staff in the usual fashion and, therefore, not furlough them or seek support via the Scheme.

Independent special schools

Local authorities will continue to receive their high needs budgets and should continue to pay top-up and other high needs funding to independent special schools, so that the employment and payment of staff supporting children and young people with SEND can continue. Some independent special schools also have pupils who are funded privately instead of under an EHC plan. These institutions should only access support schemes in relation to the proportion of staff that is not supported through public funding, and only to the extent that the school is facing a loss of income because the children have been withdrawn by their parents leading to a loss of fee income.

Further education and apprenticeships

Where the provider is continuing to receive public funding through any of its usual routes they should continue delivering this provision where feasible, including through remote delivery. They should not furlough staff whose salaries are paid from continuing Education and Skills Funding Agency (or any other public) income. This applies to both teaching and non-teaching staff.

The Government recognises that many providers rely on funding from a mix of public sources and other income streams such as fees, employer contributions and commercial income. Where public income has reduced or non-public income has ceased or reduced, it may be appropriate for providers to seek support from the Scheme to furlough staff. Providers should only furlough employees if they meet the five conditions above.

If it is difficult to distinguish whether staff are funded through continuing public funding, for the purposes of meeting the first three conditions, then the total proportion of teaching and non-teaching staff (based on gross payroll) that are retained (for example, not furloughed) should, as a minimum, be equivalent to the continuing public income, as a proportion of all income that the provider usually receives. For example, if the only source of public funding is through a grant, and non-grant income makes up 25% of total income, then this should be the total maximum proportion of staff (based on gross payroll) that could be furloughed.

Where providers consider furloughing staff, they should ensure that they take a fair and reasonable approach to part-time, sessional and temporary staff, reflective of good HR practice and legal requirements.

Higher education

The Government expects that in most circumstances, HE providers will be able to continue paying their staff as usual because HE delivery has largely moved online, and staff are maintaining key services, including those for students remaining on campus.

If HE providers meet the criteria for financial assistance such as the Coronavirus Business Interruption Loan Scheme (CBILS) they should consider applying for these. Where those schemes are not appropriate, HE providers are eligible for the Job Retention Scheme. HE providers should only furlough employees and seek support through the Scheme if they meet the five point conditions.

If it is difficult to distinguish whether staff are funded through public or commercial income for the purposes of meeting the first three conditions, and some staff will be funded through multiple sources, as a guiding principle, HE providers should not seek to furlough a higher proportion of their wage bill than could reasonably be considered to have been generated through commercial income, including from non-public research grants and contracts. It is likely that decisions on whether to furlough staff will need to be taken on a case by case basis.

Where research work has been paused (for example, where grant holders have requested a no-cost extension to UK Research & Innovation grants) and, therefore, providers are not able to receive payments towards staff costs for a period, resulting in a loss of income due to ceased or reduced delivery of research programmes, providers should consider their eligibility and apply for the wide range of financial support that HM Treasury has already announced for businesses, including the Scheme, in line with the above conditions.

When would I use the Scheme?

The Government guidance for employers says that the Scheme is for employers who have been severely affected by the coronavirus. The employee guidance says that it is to be used when the employer is unable to operate or “has no work for you to do”.

However, all employers are eligible to claim under the scheme and the Government recognises different organisations will face different impacts from coronavirus.

When does the Scheme start?

HMRC’s online portal through which you can make the claim will be launched on 20 April 2020. The scheme can be backdated for furloughed employees from 1 March 2020 and it is expected that the first payments will be made by the end of April. The Scheme was originally set to run for 3 months from 1 March 2020 but on 17 April, an extension to the end of June was confirmed and further extensions may be announced.

Whose wages can I claim?

To be eligible, the individual must be PAYE, must have been on the payroll on 19 March 2020 and have been notified to HMRC on an RTI submission on or before 19 March 2020. Full time, part time, temporary and zero hours and fixed term staff can all be included as long as they are PAYE. Office holders, (including directors), salaried members of LLPs, agency workers and those who fall into the employment status category of ‘worker’ can be included.

Previous guidance had contained a cut off date of 28 February 2020 meaning that employers could not furlough, and claim the wages of, anyone who started after this date. The guidance was updated on 15 April 2020 to provide a new cut off date of 19 March 2020.

What happens to employees who have been transferred under TUPE?

Government guidance published on 15 April 2020 confirms that employees who were subject to a TUPE transfer after 19 March 2020 can be furloughed and the new employer can claim for their wages, to the prescribed amount, via the Scheme. Previous guidance had stated that any employee transferred on or after 28 February could be furloughed; however, key dates for eligibility have since been amended.

What do we use as the starting point for employee pay?

Salaried employees’ pay is that which they earned in the last pay period prior to 19 March 2020. You can reclaim up to 80% of wage costs up to a cap of £2500 per month, plus the associated employer National Insurance contributions and minimum auto-enrolment pension contributions on that reduced wage. Guidance published on 15 April 2020 clarifies that, if, based on previous guidance, you had calculated your claim based on the employee’s salary as at 28 February 2020 (and that differed from their salary in their last pay period prior to 19 March 2020), you can choose to still use this calculation for your first claim.

The situation for those with variable/irregular pay is different. If the employee has been employed (or engaged by an employment business) for a full 12 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.

In line with other employees, claims for employees furloughed on return from family-related statutory leave, sick leave, sabbatical and unpaid leave should be calculated against their salary, before tax, not the pay they received whilst on family-related statutory leave.

What is covered in terms of elements of pay?

The Government guidance is that commission, bonuses and discretionary payments are not included when calculating pay. All elements that you are obliged to pay your employees including wages, past overtime, fees and compulsory commission payments can be included.

Will the payment be taxable?

Yes, payments you make to furloughed employees will be subject to PAYE and National Insurance contributions.

Will I be able to recover Employer’s NI contributions and pension contributions under the Job Retention Scheme?

You remain liable for Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees. However, you can claim a grant from HMRC to cover:

  • wages for a furloughed employee (equal to the lower of 80% of an employee’s regular salary or £2500 per month), plus
  • the Employer National Insurance contributions associated with that (capped) payment, plus
  • minimum automatic enrolment employer pension contributions in respect of that (capped) payment.

HMRC will issue more guidance on how you should calculate their claims for Employer National Insurance contributions and minimum automatic enrolment employer pension contributions before the scheme becomes live.

Do I have to pay 100% of the wages in order to claim?

No. You can choose to top up to 100% but do not have to. Those who choose to top up can still only claim the 80%.

Do I have to meet minimum wage with the 80%?

Minimum wage applies to hours worked. So, if employees are furloughed and do not work and 80% of their normal earnings would take them below the NMW, this is fine.

How will I apply for the reimbursement?

You can make one claim at least every three weeks using the HMRC online portal, open from 20 April 2020. To claim, employers will need:

  • employer PAYE scheme reference number
  • the number of employees being furloughed
  • National Insurance Numbers for the furloughed employees
  • Names of the furloughed employees
  • Payroll/employee number for the furloughed employees (optional)
  • their Self Assessment Unique Taxpayer Reference, Corporation Tax Unique Taxpayer Reference, Company Registration Number or Employer Name (as appropriate)
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • their bank account number and sort code
  • their contact name
  • their phone number

Employers will need to calculate the amount they are claiming.

They should retain all records and calculations in respect of their claims, including records of the amount claimed for each furloughed employee and the period for which each employee is furloughed and a claim made under the scheme.

If employers have fewer than 100 furloughed staff they will be asked to enter details of each employee they are claiming for directly into the system - this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).

If there are 100 or more furloughed staff the employer will be asked to upload a file with the information rather than input it directly into the system. HMRC will accept the following file types: .xls .xlsx .csv .ods

The file should include the following information for each furloughed employee: name, National Insurance number, claim period and claim amount, payroll/employee number (optional).

If employers use an agent who is authorised to act for them for PAYE purposes, they will be able to make a claim on the employer’s behalf. If the employer uses a file only agent (who files their RTI return but doesn’t act for them on any other matters) they won’t be authorised to make a claim and employers will need to make the claim themselves. The file only agent can assist employers in obtaining the information they need to claim (listed above).

If an agent makes a claim on the employer’s behalf, the employer will need to tell them which bank account they would like the grant to be paid into.

What if I have already made redundancies?

Anyone on the payroll on 28 February 2020 who was made redundant before 19 March 2020 can be re-hired and put on the scheme. This applies as long as the employee had been notified to HMRC on a RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020. There is no obligation to re-hire, just that you can agree to this.

Can I agree to re-hire and furlough in any other circumstances?

Yes. Anyone who left your organisation after 28 February 2020 but before 19 March 2020 can be re-hired and placed on furlough. This applies as long as the employee had been notified to HMRC on a RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020. However, re-hiring is not an obligation and you can decide whether to do this or not. Anti-discrimination laws are likely to apply here.

How long does furlough last?

Furlough must be taken in minimum blocks of three weeks in order to be eligible for the funding. For now, the maximum period would appear to be four months until the end of June because that is how long the Government has said the Scheme will be available for.

Can I rotate employees on furlough?

Yes, it appears so. Employees can be put on furlough more than once so you can, for example, place Employee Set A on furlough while Employee Set B continue to work. Then Set B can be put on furlough while Set A come back to work. Set A can then be furloughed again, etc.

Can the employee undertake any work during furlough?

No. The employee must not be working for you at all, or for any linked or associated organisation. If they work for even an hour (during their minimum three week furlough period) you cannot claim the grant for this period.

Are all types of work-related activity banned during furlough?

Employees are able to undertake training and do volunteer work, as long as they do not provide services to or make any money for you or any linked or associated organisations. If training is done, it is likely that this will need to be online because of the social distancing measures in place. Furloughed employees undertaking training should be paid for the time because this will be work, albeit the kind permitted during furlough.

Can my employee get another job while on furlough with me?

Your normal rules on employees getting second jobs will still apply; however, you may wish to be flexible in the circumstances. It will be in your best interests to continue any restrictions on other employment which may create a conflict of interest, eg work with a competitor or client. If you do allow your employees to take on other work during their normal working hours, you should ensure that they understand that they must be available for duty when work is available again.

How do I select employees for furlough leave?

You must be careful not to discriminate when deciding who to furlough. In some cases it will be all employees, in others it will be certain departments. Where selection does need to take place, it may be appropriate to implement a similar selection period as would be used in a redundancy situation so that the most effective employees remain in work.

What about employees on sickness or self-isolating?

Government guidance released on 9 April 2020 clarified that whilst an employee receiving SSP cannot be furloughed, an employer can decide whether to place a sick employee on furlough or on sick leave. This includes those who are already on sick leave, including long-term sick leave. Where the employer places a sick employee on furlough, SSP is longer payable and the employee should receive furlough pay. Both the SSP recovery scheme, introduced as part of coronavirus emergency legislation, and the Job Retention Scheme can be used for the same employee but not at the same time. The guidance made clear that an employer should not use the Scheme as a way to “top up” sick pay for short term sickness. In any case, the minimum furlough period eligible to claim the grant is three weeks. Where an employee falls sick while on furlough, the employer can decide whether they will be on sick leave or remain on furlough. Employers should bear in mind that a furlough period of less than three weeks does not qualify for a claim to the Scheme. Employers who decide to place sick employees on SSP cannot claim for wages under the Scheme.

What about employees who are ‘shielding’?

Previous Government guidance stated that employers can furlough individuals who are shielding if they are unable to work from home and they would otherwise have to be made redundant.

However, updated guidance from 9 April 2020 now simply states that those who are shielding can be placed on furlough when they are unable to work. The “redundancy” criterion has now been removed which widens the circumstances in which a shielding employee can be furloughed. Despite this, the guidance still says that the Scheme is for use by organisations who are severely affected by coronavirus, though it acknowledges that different organisations will face different impacts.

What’s the position with apprentices?

Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed. However, apprentices must get at least the appropriate minimum wage rate for all the time they spend training which is not covered by the 80% reimbursement.

Where apprentices are furloughed or placed on unpaid leave, or where the nature of their employment changes and no longer supports their apprenticeship, the apprentice, employer and training provider should consider whether a break in learning would be appropriate.

Apprentices can be made redundant, however, specific advice should be taken on this as different rules may apply in different parts of the UK.

Employers who are subject to the apprenticeship levy payment must continue to pay this as normal; it is not recoverable under the scheme.

What’s the position with agency workers?

Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.

Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.

Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

What’s the position with those 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.

Can I furlough employees on unpaid leave?

If an employee started unpaid leave after 28 February 2020, you can put them on furlough. They will then be paid furlough pay.

If an employee went on unpaid leave on or before 28 February 2020, you cannot furlough them until the date on which it was agreed they would return from unpaid leave.

Can I furlough employees working on a visa?

Foreign nationals are eligible to be furloughed, including employees on all categories of visa.

How does furlough interact with fixed term contracts?

Fixed term contracts which ended, without extension or renewal, on or before 19 March 2020 will not qualify for the grant once they have ended. Fixed term contracts can be renewed or extended before their natural conclusion during the furlough period without breaking the terms of the scheme. There is no minimum period which must be left to run on a fixed-term contract to enable it to be renewed or extended, but it must not have ended. The furlough period must be for a minimum period of three consecutive weeks. Where a fixed term employee’s contract ends because it is not extended or renewed before its natural conclusion you will no longer be able claim a grant for them once the contract ends.

Does annual leave accrue during furlough?

Statutory minimum annual leave entitlement will continue to accrue because the contract of employment is still in existence. You may want to agree that contractual leave in excess of the statutory minimum does not accrue; however, this may present a blocker to obtaining employees’ agreement.

Can annual leave be taken at the same time as furlough?

Yes. On 17 April 2020, the Government confirmed this point. It was also clarified that employers must pay the employee’s normal pay for any annual leave but will still only be able to claim 80% of pay through the scheme. The rest must be topped up by the employer. Normal rules will apply to annual leave requests from employees during furlough which means that employers can refuse the request. Some employers may choose to do this in light of the requirement to ‘top up’ pay to 100% during annual leave.

Can I require my employees to take annual leave during furlough?

The Government has still not addressed this in its guidance. It may seem contrary to the general purpose of the WTR which provides paid time off when the worker would otherwise have been working. For this reason, employers may choose not to require furloughed employees to take annual leave until further clarification is received. Another reason may be the requirement to pay 100% of wages during annual leave.

It should be mentioned that the Working Time Regulations 1998 have recently been amended to allow for four weeks of leave to be carried over into the next two leave years where leave could not be taken due to coronavirus. This now means that all statutory minimum annual leave can be carried over, albeit carrying over the 1.6 weeks of additional leave is still subject to agreement by the employer and can only be carried over into the next leave year. Carry over of any contractual leave in excess of the statutory minimum is subject to agreement between employer and employee.

This extension to the carry over rules means that it is less of a concern for employers that employees have a potentially large amount of backed up leave to take once the pandemic passes.

What steps have been taken to prevent abuse of the Scheme?

Chancellor Rishi Sunak stated in his Government briefing on 8 April 2020, that the Scheme had been put together in a way to prevent spurious claims. HMRC’s Chief Executive, Jim Harra, confirmed measures had been put in place to minimise fraud, which were:

  • the requirement for an employer to have already been authenticated by HMRC
  • a four- to six-day payment processing period to allow background checks
  • checks on employers after a payout has been made to verify a claim was real.

Payments may be withheld or need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent. A hotline has also been set up on which employees can report employers’ abuse of the system.

Change in date of this year's Early May Bank Holiday and how it may affect holidays from an employment law perspective

Following the Government’s announcement last year, this year’s Early May Bank Holiday will move from its usual position of the first Monday in May to Friday 8 May in commemoration of the 75th Anniversary of VE Day.

Unlike in previous years, where additional Bank Holidays were provided for the 2011 Royal Wedding and the Queen’s Jubilee, the Early May Bank Holiday is simply being moved, meaning the total number of Bank Holidays across the UK will not change.

Employees will no doubt be wondering whether they will get the Friday off work and this will depend largely on the wording of their employment contracts. Employers are encouraged to review existing contracts along with their usual practices when it comes to Bank Holidays to determine how this change will impact time off next year.

Employers must remember that employees do not have the statutory right to time off on a Bank Holiday. Therefore, if staff contracts require individuals to work on Bank Holidays, then they can continue to enforce this, providing they guarantee enough time off in lieu (TOIL) to abide by the statutory annual leave requirements.

A closer inspection of terms and conditions will be required if employers usually allow employees time off on Bank Holidays. The exact wording used will be important in these circumstances to determine the employer’s options. If contracts state that employees are entitled to time off on “all Bank Holidays”, or on “Early May Bank Holiday” without expressing a particular date then employees will have a right to the day off on Friday 8 May next year.

Alternatively, if your staff contracts state a specific entitlement for employees to have the day off on the usual date of Early May Bank Holiday, eg “the first Monday in May”, then this may create some additional issues. For example, if a workplace shuts down for Bank Holidays, it could face the inconvenience of employees being on leave on a day the business remains open and available for work on a shutdown day. Employers could rely on any flexibility built into the contract to designate the Friday as an alternative day of leave.

Employers should take time to review their contracts and existing practices before confirming their approach. Regardless of the approach, they should confirm their position on the moved Bank Holiday with their employees and ensure everyone is aware of their leave entitlements for 2020.

In light of the coronavirus outbreak, staff may have been furloughed when May Day falls in 2020. Government guidance confirms that furloughed staff can take annual leave but must be paid in full for this time, meaning the Government will only fund 80% of their wages and the organisation will have to fund the remaining 20%. If staff are contractually permitted to take Bank Holidays, they should be paid in full for any Bank Holidays that fall during a period of furlough, or the employer could seek agreement from staff to take the day in lieu at a later date.

Content last updated 22 April 2020

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