Furlough: Coronavirus Pandemic

• Coronavirus Job Retention Scheme ('Scheme’) 

The UK government’s Scheme allows employers who are unable to maintain their current workforce to furlough employees and apply for a grant to cover 80% of their usual monthly wage costs, up to £2,500 a month.  

 

According to the Government the Scheme will provide a grant to cover "the lower of 80% of an employee's regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included".
 

It is understood that the Scheme will cover an initial three month period from 1 March 2020, extendible by the Government if deemed necessary. The Government has extended the period to June 2020. 

 

• How an Employee will benefit

Furlough allows employers to retain employees by reclaiming 80% or a maximum of £2500 of their salaries from the Government for the duration of the Scheme, otherwise such staff members who are not fully utilised might instead be made redundant. 

 

• Who is eligible?

If you are a full-time employee; part-time employee; an employee on agency contract or an employee on flexible or zero hours contract you will be eligible. You will be required to grant consent to your employer to be furloughed.

 

• If  furloughed you cannot work for your employer during the period 

 

It is important to note that employees that are furloughed cannot work during their period of leave.

 

• When Furlough does not apply

 

If you are self-employed or work as a freelancer, the Scheme would not apply to you.

If you are a consultant and work for a sell employed organisation, depending on the terms of your consultancy agreement, the organisation is unlikely to be covered by the Scheme unless agree otherwise with them.
 

© RT COOPERS, 2020. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

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