Update: Coronavirus Job Retention Scheme FAQs

The Coronavirus Act 2020 achieved Royal Assent on the 25th of March 2020 and the Act is now published online.  As a result, further details have been published about the Coronavirus Job Retention Scheme, which includes furlough leave.

Although there are many questions left unanswered by this recent publication, there is some clarity on a few points.  Having been asked several questions on the scheme which we can now answer with a degree of certainty, we thought it helpful to publish these below.

Can I furlough somebody and then take them off furlough?

This is still not clear, however, you must furlough for a minimum period of 3 weeks.  If you have furloughed somebody for 2 weeks then they will not be eligible for the government funding and you will need to fund it yourself.  Prior to this official announcement, the Nicholsons HR team were advising clients to furlough people who would be likely to be off for a longer period of time, which we can now see was the correct advice.

What we don’t yet know for definite is if somebody can be furloughed for 3 weeks, returned to the business and then re-furloughed.  If this is possible, then the minimum 3-week furlough period would still apply to each instance.

Can I put someone onto furlough who started at the beginning of March?

Yes, but you’ll need to pay them yourself as you won’t be eligible for funding.  The government have said that this applies to anybody who was on PAYE as at the 28th of February 2020.   We don’t know for definite why this is the date set but we believe it’s due to it being the last Friday and working day in the month and therefore, everyone would have been paid by then.

How long does the scheme run for?

The scheme is open from the 1st of March 2020 to the 31st of May 2020, the government have said they will consider extending but this is not a guarantee.

How much is the maximum?

Employers can reclaim up to 80% of wage costs to a cap of £2,500 per month, in addition to the associated employer NICs and minimum auto-enrolment pension contributions for their pay.  The guidance says that  fees, commissions and bonuses are not included.

However, the published guidance refers to ‘usual monthly wage costs’ and therefore, if a bonus is paid regularly, we think this needs further clarification from the government in line with developed case law in holiday pay – leading case Lock v British Gas Trading Ltd [2014] so we will need to await further guidance in this area.

What about zero hours and casual workers?

These are covered by the scheme, as well as agency workers who aren’t working.  Our team can help you with the necessary calculations, but the key message is that they will be eligible.

What about National Minimum Wage if I only pay 80% of their wages?

As minimum wage is only payable for hours worked, this wouldn’t be a breach because on furlough leave, no hours are being worked.

However, when minimum wage increases in April, we don’t yet know whether the furlough pay will need increasing in line with any uplift.  We suspect it will though.

My employee has a second job, are they still allowed to work whilst being furloughed from my company?

Yes, if they had 2 jobs as of the 28th of February 2020.  Those who are self-employed as well as employed will be eligible for one scheme or the other.  The self-employed scheme will only be available to them if that is their main source of income.

We don’t anticipate that it will be possible for an employee to be furloughed from their full-time job and then take up work elsewhere as it defeats the object of the scheme – to preserve employment and avoid redundancy, not to “boost” earnings with public money.  Employees also need to be available to return to work at any time from the job they are being furloughed from.

The scheme is expected to be up and running from the end of April.

For further information or specific guidance in any situation, please do not hesitate to contact our HR experts on hrmail@nicholsonsca.co.uk

We aim to reply to all queries within 24 hours due to the current high levels of queries we are receiving, but will always reply sooner wherever possible.