What is furloughing and what does it mean for me?

4 min read
April 07, 2020

All of a sudden, millions of people around the UK are finding that they’ve been ‘furloughed’ (or not) and are wondering what that means. 

In a nutshell, if you’re furloughed you are agreeing with your employer to being kept on your work payroll, even though you aren’t working. The current scheme is designed to help businesses keep paying their employees when they can’t work due to lockdown restrictions. The plan was created so people could still remain employed, even though they can’t work or because there is not sufficient work for them during the lockdown. 

Our friends and MoneySavingExpert have a great guide on employment issues here. 

Here’s how it works:

  • You employer claims up to 80% of your wages from the Government.
  • This is capped at £2,500 a month for each person before tax. 
  • Your employer will pay you the 80% or up to the £2,500 as part of the scheme but your employer has the option to top up your salary to the amount you would usually earn.  
  • Your employer must let you know if you are being furloughed. 
  • The Government scheme started on 01 March 2020 but will not be available for employers to claim until roughly the end of April 2020. The scheme will run for (at least) three months. 
  • Employees must have been employed on or before 28 February 2020 (there are other business conditions involving being enrolled for PAYE, for example).
  • When on furlough, you cannot work for your employer – you’re basically off work on (possibly reduced) pay. You still have to pay tax on this too.  You can receive training whilst furloughed.
  • The minimum period of furlough is 3 weeks and some employers are staggering it through the work force.

Who can be furloughed?

If you’re being paid through PAYE (here’s the Citizens Advice guide to PAYE) and were on the payroll as of 28 February 2020 then you could be furloughed if you are not able to work. 

This includes staff who are:

  • Full time
  • Part time
  • On zero hours contracts
  • On flexible contracts
  • Agency staff (if on PAYE contract at the time)

What if I was made redundant or left before 28 February 2020?

Your employer can technically re-employ you and put you on furlough, then claim your wages back. But this is their choice to do this. 

However, if you left after the 28th, then the scheme wouldn’t cover you. 

I’m worried about going in to work for health reasons – can I ask to go on furlough?

Complicated this one. If you’re ‘shielding’ as per the Government guidance for 1.5 million people then you should be able to be furloughed.

If you’re on sick leave then statutory sick pay (SSP) usually applies, but if you return to work you could be furloughed though the details about how this might work aren’t set in stone. 

If you have concerns about doing your job during this period then speak to your HR team and explain what’s worrying you. Your employer must make sure that the Government guidelines on social distancing and lockdown rules are being observed, though we appreciate that some employees are disputing this is happening. 

Does furloughing cover other payment perks?

Furloughing does not cover bonuses (your firm can still pay them if they want though) or commission since March. Basically, non-basic wage things aren’t covered. 

Can apprentices be furloughed?

Yes, they can. 

I’ve not been furloughed but I’ve been asked to work on reduced pay/hours

Unfortunately, this can happen, though the business will have to pay you as normal rather than get the 80% support from the Government for you wages. 

If you are really struggling due to this, then speak to the HR team urgently and explain the situation. You may also qualify for Universal Credit. 

Can I work for someone else or volunteer?

If you’ve got more than one job you can get furloughed by any of your employers. You could find yourself working for one but not another. As long as you’re not moonlighting and it’s all above board (you’re not breaching contract, basically) then you should be okay.  

Volunteering is allowed too – but only if you aren’t generating cash for the business, you’re volunteering for by doing so. So supporting your local NHS by working for/with them is fine, for example 

What about people who work for me in an individual capacity?

You can furlough staff like nannies, cleaners, gardeners, etc as long as you pay them through PAYE as per the guidance on the Gov.uk website. 

How many businesses are furloughing staff?

The British Chamber of Commerce (BCC) is tracking the impact on businesses here: https://www.britishchambers.org.uk/news/2020/04/bcc-coronavirus-business-impact-tracker 

What happens to my job in a few months?

This is one of the great unknowns, because no one can give you an assurance that your employer will stay trading in the future. 

Ideally, furloughing will allow businesses some space to get through the worst of the pandemic so when it’s peaked, they can start up and pay/employ you again. But beyond the scope of the scheme, we can’t predict what will happen and by being placed on furlough does not guarantee you will not be made redundant in the future.  

How do employers claim this grant?

HMRC will be setting up an online portal for employers to claim the payments (coming soon). Claims will be backdatable to 01 March 2020 and they can claim every three weeks.

What if I’m on maternity/paternity leave?

Your employer can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for either:

  • maternity pay
  • adoption pay
  • paternity pay
  • shared parental pay

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