We've been receiving a lot of queries from employees and workers about furlough leave and redundancy, so we compiled a list of answers to the most frequently asked questions. These are broken down into questions about furlough, redundancy and other variations such as pay reductions.
How much will I be paid while on furlough?
Your employer will claim 80% of your monthly earnings up to a maximum of £2,500. What this means, is that if you earn £37,500 or less (before tax) you will receive 80% of your salary. If you earn more than £37,500 (before tax) then you will receive less than 80% of your salary.
You will still be taxed on this amount through your employer’s PAYE system. So, the normal deductions for income tax, national insurance, student loans, pension etc. will be made.
Will my employer have to pay the rest of my salary not covered under the Coronavirus Job Retention Scheme?
Employers are not obliged to top up your salary but they can if they want. This is something you need to check with your employer. If they use our SeedLegals Furlough Notice to place you on furlough leave, your employer is given the option to top up your salary.
80% of my salary is less than the National Minimum Wage. Is this legal?
Yes. As you are not working, you are not entitled to the National Minimum Wage and so may be paid less than that.
Will my employer still need to make pension contributions for me?
If you are on furlough leave, HMRC will cover your employer’s minimum pension contribution under the scheme.
What happens if I don’t have an annual salary and instead my pay varies month-by-month?
Your employer can claim for the highest of either:
Your same month’s earning from the previous year, or
Your average monthly earnings for the 2019/2020 tax year.
If you have been employed for less than 12 months, your employer should claim for 80% of your average monthly earnings since you started work. If you only started in February 2020, they will work out a pro-rata for your earnings so far and claim 80%.
How long can I be furloughed for?
Your employer is required to tell you how long you will be furloughed for. This can be for any amount of time, however to receive the reimbursement from HMRC, your employer must furlough you for a minimum period of three weeks.
My employer wants me to be furloughed for three weeks and then come back to work. Is this allowed?
Yes. You can be furloughed for any amount of time and then return back to work subject to your employment contract.
The important information here is that you must be furloughed for at least three weeks under the scheme and if you are furloughed beyond July 1st your employer will not receive any further reimbursement under the scheme (although this could change as the situation develops).
Are the terms in my varied contract going to last beyond my period of furlough leave? What about my pay?
It depends on what your contract variation agreement stated. In our Furlough Notice, we explain that the variations (e.g. the ability to pay you a lower wage) will only last until a certain date. After that date, you would return to working for your company under the old terms of your employment contract, as if the variation never happened.
However, be wary of other contract variation agreements that do not have a defined end date, as you may inadvertently be agreeing to receiving a lower salary indefinitely. If what you have been given does not have an end date, it would be reasonable to request one.
How will I know when the first day of my furlough leave is?
Your employer must formally notify you of the beginning of your furlough leave.
I’m self-isolating/on sick leave. Can I be furloughed?
Whilst you are self-isolating or on sick leave you should be getting statutory sick pay. Whilst receiving this you cannot be furloughed. Once you signed off and you are no longer receiving statutory sick pay, you can be furloughed.
Will it cover my bonus/commission payments/non-cash payments?
No. The scheme only covers your usual monthly pay. This includes wages, past overtime, fees and compulsory commission payments only.
I’m on a part-time/zero hour/flexible/agency contract. Can I still be furloughed?
Yes. The scheme applies to all these types of employment contracts as long as you were on the employer’s PAYE payroll on 28th February 2020.
I am on a fixed-term contract. Can I still be furloughed?
Yes, as long as you were on the employer’s PAYE payroll on 28th February 2020. Your contract can also be renewed or extended during the furlough period without breaking the terms of the scheme.
My employer is a sole-trader. Can I be furloughed?
Yes. It does not matter if your employer has a company or not, what matters is whether they have set a PAYE system and have paid you through it since 28th February 2020.
I have more than one job- how does this affect being furloughed?
If you have more than one job you can be furloughed for each job. The 80% cap up to £2,500 per month applies to each job separately.
Can I work for another employer if I have been furloughed?
If your existing employment contract allows this, you can work for another employer if you have been furloughed.
Can I work for my employer whilst I’m furloughed?
Generally the answer is no. In order to claim under the scheme you cannot do any work at all for your employer. Recent government guidance has now stated that furloughed employees can take part in voluntary work, as long as it doesn’t generate income for the employer. The employer can agree to find furloughed employees volunteering opportunities if this is in line with public health guidelines.
If you are undertaking training whilst furlough you must be paid at least the National Minimum wage or National living wage for the time spent training.
I have young children, can I be furloughed?
Yes. If you are genuinely unable to do your job because of your caring responsibilities, which includes looking after children being home-schooled, you are eligible and can be placed on furlough leave if your employer agrees even if your role could be performed.
Do I have to take my pre-arranged annual leave?
If you have holidays booked in the coming weeks that would fall within your period of furlough, your employer has the right to insist that you take it.
If you want to take annual leave during your furlough period you should be able to as your holiday rights will be unaffected.
Will my holiday still accrue whilst I’m furloughed?
We believe that it is likely the 5.6 weeks leave under the Working Time Regulations 1998 would continue to accrue during furlough leave. However as furlough leave is a new concept, this is not certain yet.
I have not been furloughed, but my employer is insisting I take my annual leave during lockdown, is that allowed?
Yes. Most employment contracts state that employers reserve the right to insist that holidays are taken at certain points in the year. This is a cost saving measure your employer is taking. They are making sure all hands will be on deck once the lockdown period is over.
Can I refuse to be furloughed?
Yes. An employee needs your consent to furlough you as it is a variation to your employment contract. However, your employer can still terminate your contract or make you redundant. Remember the primary reason behind furlough is to ensure you have a job to come back to when all of this is over. If not having a job is the alternative, it makes no sense to refuse.
Does my employer need to consider the furlough scheme before making redundancies?
No. There is no legal obligation under the scheme to consider furlough leave before they consider redundancies. If your employer is legitimately worried about not having enough cash to pay salaries before the scheme is set up (this is the end of April, it would be a legitimate decision to make redundancies.
Is it unfair dismissal is my employer makes me redundant rather than placing me on furlough leave?
Whether or not dismissal is unfair depends on the circumstances of the company and whether coronavirus genuinely led to diminution of work in the area the employee was formally employed. Dismissals should also not be discriminatory in nature.
I have already been made redundant. Can I put on furlough leave instead?
Individuals made redundant after 28th February 2020 can be re-hired provided it is on the terms that you are then furloughed to preserve their job. Your employer needs your consent to do this.
If I get made redundant what payment will I receive?
As minimum you will receive statutory redundancy payment. This is made up of:
1.5 weeks gross pay for each year of employment up to 20 years where a person is aged 41+
1 week gross pay for each year of employment up to 20 years where a person is 22-40 OR
Half a week pay for each year of employment up to 20 years if a person is under 22.
The above is also subject to the cap of grossly weekly wage. This limit is currently £538. This means the maximum you would receive is £16,140. This would be received on your final payday.
Can my employer make me redundant during or at the end of my furlough?
Yes. However, any redundancy should be in line with normal redundancy rules.
Can my employer ask me to take a lower salary?
Your employer can ask you to take a lower salary, however as this is a variation to your employment contract, both you and your employer must agree to it. If you do not agree your employer can still terminate your contract or make you redundant. Your employer also has no obligation to consider furloughing you instead of reducing your salary. If not having a job is the alternative to taking a lower wage or reduced hours, it makes no sense to refuse. They are probably requesting this because they have little other choice so bear in mind that refusing the lower salary may well lead to being made redundant.
However, be wary of contract variation agreements that do not have a defined end date, as you may inadvertently be agreeing to receiving a lower salary indefinitely. If what you have been given does not have an end date, it would be reasonable to request one.
Can my employer ask me to work less days?
Your employer can ask you to work for less days, however as this is a variation to your employment contract, both you and your employer must agree to it. If you do not agree your employer can still terminate your contract or make you redundant. Your employer also has no obligation to consider furloughing you instead of making you redundant. If not having a job is the alternative to taking a lower wage or reduced hours, it makes no sense to refuse. They are probably requesting this because they have little other choice so bear in mind that refusing the lower salary may well lead to being made redundant.
However, be wary of contract variation agreements that do not have a defined end date, as you may inadvertently be agreeing to working less days indefinitely. If what you have been given does not have an end date, it would be reasonable to request one.