Furlough – Your Questions Answered
Until last week, businesses, employees and employment lawyers were braced for the government’s Coronavirus Job Retention Scheme (CJRS) to end and be replaced by the much less generous Job Support Scheme. However, at the last minute, the government has changed its mind.
In this article we will give a re-fresh for employees on how the CJRS currently works and how it affects employees.
For those still facing redundancy, please stay tuned for our upcoming article on how the furlough scheme affects termination and redundancy.
Can I be put on furlough even if I was previously not furloughed?
Yes, you can, the government has re-opened the scheme to new entrants – if you joined your employer’s payroll by 30th of October (i.e if you received wages or salary at the end of October), you are eligible to be furloughed.
How much should I be paid on furlough?
The government will pay 80% of your normal salary or wages up to a cap of £2,500 per month. Your employer can choose tot op this up if they wish, but they don’t have to.
How should my normal pay be calculated?
For those whose pay does not vary (e.g you are paid a salary or a fixed hourly wage for a fixed number of hours every month) then your normal pay is just that – you’ll be eligible to receive 80% of that figure up to £2,500 (but see below for those on reduced hours).
“Pay” can include overtime, and can also include “non-discretionary” commission and bonuses (i.e where these are required by your contract). It does not include performance-related pay or benefits in kind.
If your hours normally vary, then your employer will work out the average hours you worked in the last pay period. Your payslips should confirm the number of hours you worked, so you can check this against your old payslips if you are unsure.
Likewise, if your pay normally varies, your normal pay is calculated as an average of what you earned in the last pay period.
Can I work whilst on furlough?
Employees may now work part-time – but their employer must pay them for the hours they work, and then the government will pay 80% of the difference between the hours actually worked and their usual hours. For example:
An employee usually works 20 hours per week at £10 per hour earning £200 per week. They are furloughed part time and only work 10 hours. Their employer will pay them £100 a week for the ten hours worked and the government will pay a further £80 per week for the ten hours not worked.
If you are working reduced hours, the £2,500 cap is reduced proportionately. So, if you usually work 40 hours per week, and your hours are reduced by 50%, then the maximum you can receive in furlough pay for the remaining 20 hours is £1,250.
Does my employer need my agreement to furlough me?
If you are on a contract that specifies you should work a certain number of hours per week then your employer should agree the change to your working hours with you, and this should be in writing. An e-mail response from you confirming that you agree to be furloughed should be enough.
If you are on (for example) a zero-hours contract, then your employer technically does not need your agreement since they have no obligation to provide you with work. However, they still need to inform you in writing that you are being furloughed.
How will being furloughed affect my pension?
Since August, employers have had to make pension contributions in the usual way (in addition to paying National Insurance) and this will not be covered by the government. Pension contributions for both employer and employee will be calculated as a percentage of whatever the employee is receiving as furlough pay (or, where they are part-time furloughed, on the total of their pay for hours worked and their furlough pay).
If you usually make your pension contributions via a salary sacrifice arrangement, this arrangement should continue. Your furlough pay will be calculated on the basis of your post-sacrifice pay and you should receive that pay without any pension deduction (otherwise you’d be paying twice!).
Your employer should pay your pension contribution in the way they normally would – however whether they continue to pay the same amount as before will depend exactly on what your contract or any written agreement requires. Some employers may seek to terminate a salary sacrifice arrangement during furlough – you should seek further advice from a pension or employment specialist if asked about this.
It is worth discussing with your employer how your pension contributions will be calculated during your furlough period, and discussing this with a financial adviser if possible – you can get free advice from the Money Advice Service.
I’ve been furloughed and am about to go on maternity, paternity or other family leave – will this affect my pay?
The short answer is no.
For several types of family leave, the pay you receive for all or part of the leave period is related to how much you earned just before you went on leave. This means that those going on leave might earn less if they are put on furlough immediately before their leave period starts.
But in April the government changed the rules for the following:
- Maternity Pay
- Paternity Pay
- Adoption Pay
- Shared Parental Pay
- Parental Bereavement Pay
Meaning that where an employee is furloughed prior to starting leave, their pay during leave will be calculated based on what they would have been earning had they not been on furlough, not on their furlough pay.
Can I stay in touch with work whilst on furlough?
Yes, you can; you can be involved in virtual social events and be kept informed of changes happening in your organisation. You can also take part in volunteer work or training. However, you cannot do any work that earns money for your employer or provides services to your employer.
Also, if you are a union or non-union employee representative (for example, in relation to proposed redundancies) you may also undertake any duties relating to that role – the government has confirmed that this is not considered “work” for the purposes of the furlough scheme.
Can I raise a grievance or participate in disciplinary procedures whilst on furlough?
The government has not given any specific guidance on this – we think the answer might well be no. We suggest that if you find yourself in this situation, get in touch for more specific advice (see the links below).