Furlough questions from Solving the COVID-19 Puzzle Webinar
Please note that none of the answers below are intended or should be construed to provide legal advice. All answers are based on my interpretation of the current Government guidance in place from time to time, which is changing on a daily basis. If you require further information or have a specific query in respect of an employee or your practice, I would strongly urge you to seek legal advice in this regard.
1. My practice is closed at present as I'm in quarantine, If I furlough staff now, and I come back to work in 2 weeks, can I have a few members of staff back to work? I would be doing emergency eyecare/ MECS etc
Furlough workers must not undertake any work that makes money or provide any services for their employer whilst furloughed and this must last for a period of at least three weeks.
Therefore, you would not be able to request them to come into work after two weeks, but could after the third week. In the weeks that they do carry out some work, even if this is on reduced hours and pay – you will not be eligible for reimbursement under the Coronavirus Job Retention Scheme (CJRS) and would need to advise them that they would only be paid for the hours worked (known as short-time working), which you also need a contractual right to enforce. They may be eligible for Universal Credit in the weeks that their earnings are lower.
2. We have an employee who has handed her notice in at Specsavers. This was about 2 months ago. She is due to start with us in a month. She hasn’t signed a contract. Can she be furloughed? Who does this, us or Specsavers?
This will depend on when she is due to start work with you. You could seek her agreement to defer her start date, since she will not be eligible for furlough through you if she was not on the PAYE system on 28 February 2020.
If she is still in her notice period – this will be up to Specsavers to deal with.
3. We genuinely have 2 new employees who started on 1st March so they cannot be furloughed.
The guidance suggests that they must have been on the PAYE system on 28 February 2020. If they were not – they cannot be furloughed.
4. Is there an HMRC web link yet for Furloughing staff?
The portal is not yet completed. The guidance suggests this will be done by the end of April. In the meantime, the following links provide more guidance:
5. Can staff do unpaid voluntary activities in the business - say painting - they have requested doing something to help
The updated guidance says that they can undertake training or volunteer, provided that this is in line with Public Health England guidance – but this cannot be to:
- Make money for their employer
- Provide services to their employer
As such, this would suggest that even painting or answering calls to help their employer would fall foul of the scheme.
6. If you pay yourself dividends can you claim through self-employed?
I do not have a definitive answer to this since the scheme was only announced yesterday and further guidance is likely to emerge. It seems at present they would not fall under the scheme, but if you have a salary alongside the dividend and are also an employee, you could furlough under the CJRS scheme – but it is unlikely that you can benefit from both.
The self-employed grant is based on their profits, rather than dividends. In any event, if you have a salary, it will be much quicker and easier to obtain the grant via the CJRS scheme that the self-employed scheme.
7. We are due to employ two people during this period; we need them when we come out of this. Jobs were offered, notices were handed in before any of this happened. Can we furlough them as they start? Sounds like maybe not.
Unfortunately not – as stated above, only workers on the PAYE system on 28 February 2020 are eligible.
8. What happens to accruing holidays during furloughed period. If this goes on a while like 3 months that is a significant amount of holiday pay, we will need to find once this is all l over.
It has been announced today that the Working Time Regulations 1998 are to be amended to allow for carry-over of at least 4 weeks’ holiday into the next two years, where they are prevented from being taken due to Coronavirus. The announcement seems to suggest this only applies to key workers, but the guidance is lacking in this area and until the legislation is released it will all be interpretation of the guidance.
In my view, it is more than likely holidays continue to accrue during furloughed periods, since all other rights are expressly stated to apply such as SSP, the right to redundancy, not to be unfairly dismissed, maternity and other parental rights.
9. I have an employee who is useless, she has been with me for 4 months. How do I dismiss her?
I would urge you to take legal advice on this as normal rules and considerations around unfair dismissal will apply.
10. Can furloughed staff come into volunteer for an hour so if needed for emergency patients
Please see question 5 above.
11. Can you pay 80% when staff on minimum wage
Yes – the updated guidance stated that NMW/NLV is only due for the hours that they are working. Therefore, if they are furloughed and not undertaking any work, they can be paid 80% of their wage/salary, even if it brings them below NMW.
However, please note that if they undertake any training or online courses whilst furloughed they must be paid NMW/NLW for the time spent doing this, even if it is more than the 80%.
12. Do staff continue to accrue holidays whilst furloughed?
See question 8.
13. Can furloughed staff perform any duties for the practice?
See question 5.
14. Can I reduce the employees worked hours?
This will depend on your contract of employment and whether you have an express right to reduce working hours and corresponding pay. If not, you would have to enter into a period of consultation with them and seek to vary the terms of their employment. In these circumstances, they may be entitled to other benefits such as Universal Credit.
15. Can we top-up the remaining 20% if a Furloughed employee agrees to be Furloughed?
Yes – this is optional. But if you are not paying 100%, you should ensure that the signed variation accepting furloughed status makes provision for the reduced salary/wages to 80%.
16. I am a Locum with regular days and am a Ltd company. Do I qualify for any of these benefits?
This will depend on how you are paid for your services and whether this is through a PAYE system – or whether you would be considered self-employed and therefore, fall under the
Self-Employed Income Support Scheme (SEISS). If the latter, it is my understanding that HMRC will contact you.
17. Do you have to change your employees’ contract of employment to furlough them?
You do need to evidence their written and signed agreement to the terms of the furloughed period, which would amount to a variation of contract. Depending on the number of staff and whether any dismissals are envisaged, you may need to consider collective consultation to implement the changes.
18. If staff had booked holidays and now no longer wish to take it can I make them?
Under the Working Time Regulations 1998 you can enforce holidays on twice as much notice as you require them to take i.e. if you require them to take one week, you must give two weeks’ notice. However, in light ofthe recent announcement regarding carry-over of annual leave, this may be subject to change in the current circumstances.
19. Can a furloughed worker be taken off furlough if another member of staff has become ill? In which case can he/she re-join the furlough scheme once things are back to normal?
Yes – but provided that they have been furloughed for at least three weeks before coming back into work.
20. I have all staff on salary sacrifice for pension. How does this affect furloughed pay?
I imagine that it will depend on the wording of the scheme – they might be allowed to cancel (maybe on a certain amount of notice) in which case their pay will increase and they’ll be entitled to receive a higher amount. More guidance on the impact of NI and pensions is due to be released before the portal goes live.
21. If a part time employee agrees to furlough, do they receive 80% of the pro-rata salary, or 80% of the salary if they worked full time?
I anticipate that this will be based on 80% at their pro-rata salary, as the calculation should be based on their regular wages. The guidance says “For full time and part time salaried employees, the employee’s actualsalary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.” More guidance in respect of calculating your claim is due to be released before the portal is up and running.
22. What about staff whose salary is due to increase in line with the National Living Wage on 1 Apr - will their furlough grant reflect that mandatory increase?
This is currently unclear. However, given that the guidance states that NMW/NLW is only based on hours worked and the 80% during furlough can drop below NMW/NLW, I would anticipate that the increase to NLW will not affect the amount of pay until they return to work – or if they undertake any training as outlined above.
23. If furlough not available until end of April, do I pay staff 80% in April before claiming back?
This appears to be the case. Employers are expected to continue paying and then apply to be reimbursed via the scheme. However, if there are cashflow problems with this, you may need to seek a loan or ask the employees to sign and agree to deferring their pay.
24. What does backdate mean - it seems to contradict the absolutely no work during furlough
It is my understanding that this is for those people who were already laid off or made redundant before the scheme was announced and not for any employees who have been working during this period. The guidance says that employees who were made redundant since 28 February 2020 can be rehired to benefit from the scheme.
25. I have a need for a member of staff but for much less hours. Just need help a few hours a week. If I don’t furlough them, they would be hugely financially disadvantaged. If I furlough, I personally take the brunt
If you are contractually able to reduce their hours and pay (short-time working) then yes they will be at a financial disadvantage. However, they can apply for certain benefits such as Universal Credit if their earnings drop below a certain level. If you were to furlough them, as outlined above they cannot do any work for you, orprovide any services.
26. If someone is currently self-isolating and on SSP then we furlough staff can this person have furlough back dated or does their furlough start when their SSP was due to finish?
It is my understanding furlough can start after a period of self-isolation, but cannot be back dated to cover the period of self-isolation (as this only warrants SSP) – depending on the circumstances.
27. can directors be furloughed?
This again depends on whether they are on the PAYE system on 28 February 2020. Executive Directors may have a low salary high dividend – therefore, they could be furloughed and be reimbursed for up to 80% or capped at £2,500 for the salary, but not the dividend. However, the Director cannot undertake any work during the furloughed period, including admin or payroll and HMRC have reserved the right to audit all claims made.
28. If we still have not furloughed, will we be able to back date it even though normal hours have been worked to until now.
See question 24.
29. Our cleaner works at another place as well as ours, can she be furloughed?
Yes - If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
30. Can you rotate furlough staff?
Yes – but they must be furloughed for at least three weeks to be eligible for the scheme. But they can then be furloughed again after a period of work.
31. Do you know what would be the position of those who have booked holiday but now cannot go what our situation is? - if they are furloughed
It is currently unclear. It is my view they can still use the holiday and you would have to pay 100% for those days and claim back the 80% (subject to the terms of the scheme on holidays – which have not been mentioned in any guidance).
Or they could cancel and carry these over.
32. What about pension contributions. do we have to pay for someone who is furloughed?
Employers minimum automatic enrolment contributions can be reclaimed under the scheme, for the 80% subsidised wage. You can choose to provide top-up salary in addition to the grant. Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme. There is more guidance on this due before the portal is up and running.
33. What about employees who had been given their notice period at the end of February (in this case 24/02/20) and chose to walk away and not complete notice period (told me not coming into work from 03/03/20 onwards). Can they claim that they should be furloughed?
There is no automatic right to be furloughed and employees cannot apply themselves. In these circumstances it is unlikely that they would be eligible for the scheme if they resigned of their own free will.
34. Can we rotate staff? some on furlough for two weeks others for next two weeks.
See question 30.
35. Hi guys, if I employed someone on the 15th March is there any way, I can overcome the furlough issue to be able to get the 80% pay grant?
Not if they were not on PAYE on 28 February 2020.
36. If a staff member is in a medically vulnerable group that means they must self-isolate and are entitled to SSP, can they agree to be furloughed? Similarly, we have an employee who has advised us this week that she is pregnant and so is also eligible for SSP, can she elect to be furloughed?
Employees who are “shielding” in line with public health guidance can be placed on furlough i.e. those advised to stay at home for 12 weeks’. The same would apply to the pregnant employee, depending on how many weeks’ pregnant they are and whether they fall into the “shielding” category.
However, strictly speaking nobody can ‘elect’ to be furloughed, it has to be agreed by the employee and employer and the purpose is to avoid being laid off or possibly being made redundant.
37. Would like to know if a member of staff is on 12 weeks SSP due to special circumstances how that works going forward? Are they entitled to furloughed even though they can’t work?
See question 36.