Understanding Furlough

Understanding Furlough

27th April 2020

If your place of work has temporarily shut down or there’s no work for you because of coronavirus, you can carry on getting paid. 

Your employer can use the government Coronavirus Job Retention scheme to pay you while there’s no work to do.  This is called being on furlough.

If your employer applies to the scheme, you’ll be paid 80% of your normal pay up to a maximum of £2500 per month. This will continue until the government ends the scheme or you return to work. 

When your employer applies for money through the scheme, they have to pay you for any time you were sent home from 1 March 2020.     This is called ‘backdating’ your pay.  The furlough pay is based on your normal wage excluding fees, commissions and bonuses

The Coronavirus Job Retention scheme only covers you if you’re not working.  If you’re working from home you should get your normal pay from your employer.

The scheme covers anyone who was on their employer’s PAYE payroll as at 19 March 2020.  If you started your job after that date you will not be covered.

If your boss tells you that you have been “laid off” or made redundant or dismissed because there is no work for you then you should ask him to clarify this in writing.  If you have been made redundant or dismissed you should ask if you can be re-employed and be paid under the Coronavirus Job Retention scheme.  If your boss says that they will not re-employ you this may be an unfair dismissal and you should seek further advice as soon as possible.  It depends on the business’s situation.

The Coronavirus Job Retention scheme covers you as long as you are still employed and have a job to go back to.  If the business is closing down permanently then you will not qualify under the scheme but you may be entitled to other payments such as notice pay, redundancy pay and for annual leave that you have accrued but not taken.  There is information about this on our website.

While you are receiving a reduced income you may be entitled to benefits such as Universal Credit or Council Tax reduction.

This advice was correct at 27th March 2020 but you should look out for updates from the UK Government.