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What to do if you have been furloughed

If you have been furloughed, this means that your employer is using the Coronavirus Job Retention scheme. You’re still employed by your employer while you’re not working – this is called being a ‘furloughed worker’. The government will only pay your employer if they have evidence you’ve been furloughed. Your employer should have sent you a letter or email explaining you’ll be paid through the scheme. If they haven’t sent you anything, ask for confirmation in writing. 

The government will work out 80% of your normal pay before tax – also known as your ‘gross pay’. You can’t get more than £2,500 a month, even if 80% of your gross pay is more than this. When the government works out your normal pay, they won’t include any commission or bonuses you usually get.

Your employer might decide to pay you the extra 20% so you get 100% of your normal gross pay, but they don’t have to. Your employer will then take off tax, National Insurance contributions and any other deductions they normally make. 80% of your normal pay might be below minimum wage. This isn’t against the law, because you’re not working. If you won’t have enough money to live on you can:

  • Check what benefits you can get
  • Check if you can get help with your bills

Which employees are eligible?

The employees that can agree to being furloughed are those working for businesses that would otherwise have to be dismissed as redundant or laid off. The furloughed employees must have been on the employer’s PAYE payroll on 19 March 2020, including:

  • full-time employees
  • part-time employees
  • agency employees on agency contracts (provided they are not working at all)
  • zero-hour contract workers (if they are employees albeit on flexible contracts).

Which employers are eligible?

Any employer (of any size) is eligible for the scheme. This includes:

  • businesses
  • charities
  • recruitment agencies (if the agency workers are paid through PAYE)
  • public authorities.

To be eligible the employer must have created and started a PAYE payroll scheme on or before 19 March 2020 and have a UK bank account. It has been confirmed that where a company is in administration, the administrator will be able to access the Coronavirus Job Retention Scheme. More information is available on the government website and further details are expected in due course. The situation is evolving rapidly, and future regulations and guidance may resolve the remaining uncertainties.

More information is also available here.