Coronavirus Job Retention Scheme (Furlough Leave)

Coronavirus Job Retention Scheme (Furlough Leave) – 6 April 2020

Employment solicitor explains latest update to Furlough Leave

Over the weekend the government published a further update to the guidance on the Coronavirus Job Retention Scheme (Furlough Leave).

This update clarifies a few areas of uncertainty that have arisen and introduces a new requirement.

Confirm employees can start working for a new employer while they are on Furlough Leave. As such, they can, in theory, be paid up to 80% of their earnings under the Scheme while working for (and presumably being paid) a new employer.

Clarify what employers can claim back from HMRC (subject to the £2,500 cap). The guidance now says that employers can claim 80% of: “wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.” Compulsory in this context presumably means contractual. Remember, employers can also claim for the minimum automatic enrolment employer pension contributions on the subsidised wage as well as their National Insurance contributions.

Clarify the fact that company directors can be placed on Furlough Leave. They can also still carry out their statutory duties while on Furlough Leave but they are not allowed to do any other work for the company.

Confirm that employees can be furloughed a number of times. But, each period of Furlough Leave must be at least three weeks long.

Introduce a new requirement that employers must notify their employees in writing that they have been furloughed. They must then keep a record of that communication for five years.