Back to Our Thinking

Furloughing – yet more essential information for employers

Head of Employment Helen Crossland summarises the points clarified and changed by the Government regarding the furloughing of employees

Following the Chancellor’s announcement on Friday 20 March 2020 regarding the Coronavirus Job Retention Scheme (explained in summary by Seddons' Head of Employment here), the government has now further clarified the following:

  • The furlough period is deemed to start on the date an employee’s work stops (which may differ for employees or roles across the company)
  • Employers cannot reclaim non-monetary benefits/benefits in kind such as health insurance and car allowance under the scheme
  • Employers can reclaim 80% of regular payments they are obliged to pay employees. This is now stated to include salary/wages, past overtime, ‘fees’ and compulsory (i.e. contractual) commission payments. It is assumed only commission from past sales/deals can be claimed since furloughed employees should not be working, including on new or ongoing business
  • Employers cannot reclaim discretionary bonuses or commission payments
  • Employers must notify employees of their furlough status in writing and keep it on record for five years
  • Employees can be furloughed multiple times and rotated with other employees provided each furlough period is for a minimum of three weeks
  • If an individual works for more than one employer (i.e. casual workers) they can be furloughed for all or any of their jobs. If furloughed, the cap on what can be reclaimed applies to each employer individually. It will not be affected should the individual continue working for any of their other employers receiving wages as normal
  • Those on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period. Only if their contracts expire (and are not renewed) will it render them ineligible under the scheme
  • Company directors can be furloughed. They can perform limited statutory duties, but no other work for the business. Any decision to furlough must be by way of a formal resolution of the Board, minuted and confirmed in writing
  • There remains uncertainty around annual leave but the current view is that taking holiday when furloughed will not break the furlough period

Should you have any questions regarding the above, or need any employment related legal advice, please contact Seddons’ Head of Employment, Helen Crossland, at helen.crossland@seddons.co.uk, or 020 7725 8034.

Share this article

What to read next

More articles from Seddons