Job Retention Scheme – FAQs
Now that we are starting to learn more about the government’s Job Retention Scheme and how the new phenomenon of furlough leave will work, we have received an increased number of enquiries about how the Scheme will work in practice. This update covers some of our recent FAQs and we hope that it may help to address some of your outstanding queries! Please do not hesitate to contact a member of our Employment Team to discuss any of these or, any more question which you may have.
Our recent FAQs
Can a Director be Furloughed?
Yes, provided that they:
-Are employed, executive directors
-Are subject to PAYE
-Were not placed on unpaid leave prior to 28 February 2020
-Their directorship commenced before 28 February 2020
-Are not a director of a business or organisation in receipt of public funding for staff costs
What can I claim for a director under the Job Retention Scheme?
Only pay which falls under the PAYE scheme will qualify for the grant under the Job Retention Scheme. Dividends, bonuses and commission payments will be excluded.
What if I can’t continue to pay employees the 80% until I receive the money from the government?
When it comes to existing principles of employment law, any failure to pay an employee their wage whilst on furlough leave as per the terms of their contract of employment would constitute an unlawful deduction from wages.
The Government is offering temporary Coronavirus Business Interruption Loans which should be available shortly. It may be that employers will need to take advantage of these loans whilst the grants through the Job Retention Scheme are forthcoming.
As an alternative to redundancy an employer could seek to take an employee off furlough leave and place them on “normal” lay off which attracts no pay other that the statutory guarantee payment.
Can employees who have been advised/instructed to self-isolate be furloughed?
Yes: once the period of self-isolation and/or sickness has ended.
What about those who have been advised to shield for 12 weeks?
This category of employee can also be furloughed provided they definitely fall within the definition of “extremely vulnerable”.
Can I accept consent to furlough by electronic means from employees who are working from home?
In the circumstances, this is fine but do ensure that your employees expressly confirm their acceptance to being placed on furlough leave and any other variations to their contract. Emails and text messages could both be acceptable methods of communication.
How do I select for furlough leave?
There is no requirement to undertake a pooling or selection exercise but employers must be able to show that there is a reduction of work to justify the furlough leave and that they have complied with usual equality and diversity policies, procedures and legislation.
Can I ask for volunteers for furlough leave?
The government has not said that employers cannot do this yet!
Can an employee on maternity leave be furloughed?
The position isn’t clear on this yet. It might be possible to furlough an employee on maternity leave and claim for the cost of the enhanced pay during this time or, it might be that the employee will need to curtail their maternity leave and return to work. As soon as we get clarity on this (and the position in respect of other forms of family leave) we will let you know.
Is the £2,500 cap the gross or net payment?
It is the gross payment.
Do I have to close my business to access the Job Retention Scheme?
No. An employer can furlough some staff but not others.
Can an employee take annual leave during furlough leave?
We don’t know the answer to this yet, but our suspicion is that this probably won’t be permitted. As soon as we get confirmation on this, we will let you know.
How will bank holidays be treated if these cannot be taken due to furlough leave?
Hopefully we will get some clarity on this shortly but with effect from 27 March 2020, employees who are unable to take annual leave due to the Covid-19 crisis will be able to roll annual leave forward into subsequent leave years.