What Is ‘Furlough Leave’?
A few key facts you might want to know
Posted on 04-23-2020, Read Time: Min
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When COVID-19 became a global pandemic, many employees in the UK were facing redundancy. The UK government’s response was to announce something called ‘The Coronavirus Job Retention Scheme’ – also known as ‘furlough leave’. This meant that the government would pay up to 80% of an employee’s wage, on behalf of their employer, if they could not work due to the coronavirus.
The reason for this was to prevent an onslaught of redundancies. Many companies, particularly those on the High Street, had to unexpectedly shut their doors on their customers. And while some companies were able to send staff home on full pay for the rest of the month, others were faced with the prospect of permanent business closure.
For official information and guidance on accessing this scheme, please visit the government’s help page here.
What We Know About Furlough Leave
The initiative was announced by Chancellor Rishi Sunak on Friday 20th March 2020. Here are a few key facts you might want to know:
- Furlough leave covers up to 80% of an employee’s wage. There are caps for higher earners. But for most employees, the government will pay 80% of their normal salary, if they are unable to work due to coronavirus. For example, because they are in self-quarantine, or your business is unable to continue trading for a while.
- Employees must not ‘work’ during furlough leave. You cannot send an employee home on furlough leave, and then ask them to continue their job from home. Any activity that is directly related to profit generation for your business, makes the employee ineligible for furlough leave. This is to prevent employers claiming money for payroll from the government, despite being able to run their business as usual. You may, however, allow employees to engage in volunteer work, or to undertake training, while they are furloughed.
- Furlough leave must last a minimum of three weeks. You cannot furlough an employee for a week, then return them to their job. Furlough leave must be taken in periods of three weeks or more. You may furlough an employee twice, but each individual period must be three weeks or more.
- You may backdate claims to the 1st March. Despite the initiative being announced on the 20th March, Rishi Sunak said that companies would be able to claim from the 1st March onwards.
If you are furloughing employees, then, if you can afford to do so, I would highly recommend paying them the 20% difference, to ensure they go home with their full pay packet. This is within the rules announced by the government, and your employees will not forget your kindness.
Just because you are struggling to operate business as usual, does not mean you cannot work on strategic areas of HR such as employee engagement and employer branding. And looking after your employees in any way you can during this difficult time, is certainly a great way to help with this.
Just because you are struggling to operate business as usual, does not mean you cannot work on strategic areas of HR such as employee engagement and employer branding. And looking after your employees in any way you can during this difficult time, is certainly a great way to help with this.
Author Bio
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John Crowley works as an Editor at People HR. Visit www.peoplehr.com Connect John Crowley |
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