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The Coronavirus Job Retention Scheme FAQs for employees

Coronavirus Job Retention Scheme faqs for employees. We answer the questions we have received from employees and continually update this page as new questions come in and/or new/amended government guidance is received. For other employer/employee related updates visit our “Coronavirus (COVID-19) – Legal advice and guidance” page.

My employer has told me it wants to place me on furlough leave, what can I expect to happen next?

The initial guidance from the government encouraged employers to discuss the situation with staff and confirm in writing if an employee was going to be placed on furlough leave but it was not compulsory in all cases to obtain their agreement to furlough. The only time an employer was legally required to get your consent in writing was if your salary was going to be reduced to the 80% provided under the Scheme.

A more recent direction from HMRC made it clear that to use the Scheme, employers must get an agreement in writing to place you on furlough leave whatever salary they are paying you.

However, HMRC has subsequently issued clarification in light of the conflict between the guidance which has been issued and the direction. HMRC has now confirmed that the guidance should be allowed, and that they will accept claims under the scheme which have been submitted in accordance with the guidance. This means that your consent will be required to furlough if your employer is paying you a reduced salary during the furlough period, but if your employer is topping up your salary to normal (100%) salary then your consent will not be required and your employer can simply confirm in writing that you are being placed on furlough.

This letter should confirm the terms of your furlough leave; including whether they are going to pay you 80% of your salary (subject to the £2,500 cap) or top up your salary to 100% and how long it will last for. Furlough leave must be for a minimum of three weeks and most companies will set an initial period of three weeks and then review it periodically to consider whether the furlough lave needs to continue. The Scheme is currently open until the end of June 2020.

Can I place myself on furlough leave?

No. It is up to an employer to choose whether or not they place someone on furlough leave. An individual cannot apply for payment through the government scheme. If you don’t think the company has enough work for you to do or you are having difficulties carrying out your normal work from home you could raise this with your employer and ask them to consider placing you on furlough leave, but you cannot force them to do so.

My employer won't place me on furlough leave, what can I do?

This will largely depend on your situation. If you are generally healthy, do not fall into one of the vulnerable categories defined by the government and can either attend work (if your job is such that this is absolutely necessary) or work from home, then your employer is likely to be entitled to require you to continue to work and can refuse to consider furlough leave.

If you are considered to be in a “clinically extremely vulnerable” group due to, for example, a specific health condition and are therefore “shielding” based on government guidance, you are entitled to statutory sick pay. The impact of this on your eligibility to be furloughed is slightly unclear. On a strict interpretation of the legislation which has recently been introduced, you would not be entitled to be furloughed until your period of shielding (and entitlement to SSP) comes to an end. However, this does conflict with government guidance which states that individuals who are shielding can be furloughed, and so we await further clarification on this point.

Whatever your situation, the first step will always be to talk to your employer to see if you can reach a compromise solution you are both happy with.

Can I be placed on furlough leave whilst in self-isolation?

If you are on sick leave or cannot work because you are self-isolating because you have symptoms of Coronavirus or live in the same household as someone with symptoms you should be receiving statutory sick pay or company sick pay. When this ends you can be furloughed but not at the same time.

If you are following general government guidance and “social distancing”, then you can be placed on furlough leave at any time. However, if you are following government guidance and “shielding” because you fall within a “clinically extremely vulnerable” group, then as outlined above, on a strict interpretation of the recent legislation, you should be receiving sick pay and so it may not be possible to be furloughed during such time. However, this conflicts with government guidance which states that employees who are shielding can be furloughed and we are awaiting further clarification on this point.

I submitted a grievance and now my employer is placing me on furlough leave. What will happen to my grievance?

Your grievance should continue whilst you are on furlough leave. You can agree with your employer to suspend it but normally it will be better for it to continue. Your employer might ask you to agree to change the process slightly or extend the time frames if people are working from home and it will take longer to complete each stage.

You can also raise a new grievance whilst on furlough leave by following your employer’s grievance process.

I am in the middle of a disciplinary process. What will happen to this process?

Any disciplinary processes should continue whilst you are on furlough leave. Under the government guidance, an employee is not able to work for their employer whilst on furlough leave. Employees can do voluntary work, and can undertake training, providing that they are not making money for their employer, or providing services to their employer. We do not believe this prevents an employee being asked to attend a disciplinary hearing, and so disciplinary processes should be allowed to continue.

Your employer can also start a new disciplinary process if necessary. You will remain bound by your terms and conditions of employment so should ensure you follow them even whilst you are not physically at your workplace or carrying out work for your employer.

Can I volunteer for the NHS or a charity whilst on furlough leave?

Yes. Under schedule 7 of the newly enacted Coronavirus Act 2020 you are entitled to emergency volunteering leave. This is limited to supporting the NHS and health services “as an emergency volunteer in health or social care”.

You can also volunteer for a charity provided the charity is not your normal employer.

My employer placed me on furlough leave and has now told me they are making me redundant. Can they do that?

Unfortunately, being placed on furlough leave doesn’t completely protect you from redundancy. The Government introduced the Scheme to encourage employers to keep employees on the pay roll and protect jobs for once the Covid-19 pandemic is over. However, if a business needs to close all or part of its business or has a reduced need for employees to carry out work of a particular kind they may be able to start a redundancy process with affected staff.

Your employer will still need to follow a fair redundancy process with you. Whether or not making you redundant in the current situation is fair is likely to depend on whether your employer makes the decision to make you redundant (rather than furlough you) before or after the Scheme has commenced, the reasons for the redundancy situation and the financial position of your employer.

The online HMRC portal to process claims opened on Monday 20 April 2020 and payments are expected to be made within an average of 6 days from the submission of the claim. As this money should be available promptly, any decision by an employer to make you redundant rather than use the Scheme is likely to be scrutinised more closely.

My employer doesn't want to put me on furlough leave but has asked me to temporarily vary my contracted hours and accept a lower salary instead. Is this possible?

Yes. If the business still has work to be completed or does not want to use the Scheme it may explore other options with you. This could include shorter hours and lower pay. In the first instance, your employer can’t force this change on you and you would need to agree to it (unless in the case of shorter hours, the employer has the right under your contract to lay you off, or put you on short-time working).

However, if you don’t agree to the change, then depending on their business reasons for asking you to reduce your hours the company may be able to dismiss you and re-engage you on the new proposed terms and conditions. Such situations are very fact dependent and it is worth seeking specific advice on your individual situation.

Your employer might also explore other options including taking accrued but untaken annual leave or periods of unpaid leave.

Do I need to agree to be put on furlough leave or can my employer force it on me?

Following the publication of the Treasury Direction by HMRC, as outlined above, there was a conflict between the Direction and the guidance which had been issued. HMRC have now confirmed that it is the guidance which should be followed, and that they will accept claims under the scheme which have been submitted in accordance with the guidance. This means that your consent to furlough will be required if your employer will be reducing your pay during the furlough period, but that consent will not generally be required if your employer is topping up your pay to your normal pay.

Where consent is required, and if you don’t initially give your consent, your employer may start a consultation process with you to impose the changes or make redundancies. If more than 20 people will be affected by this the rules on collective consultation may also apply which will affect the length of the consultation process.

My employer has chosen to put some employees on furlough leave but requires some employees to come to work. I've been denied furlough leave and this seems unfair. Is there anything I can do?

This situation may seem unfair if colleagues are not required to work but are receiving all or most of their salary whilst you are still working, either from home or at the workplace which carries an increased risk of infection. However, as long as your employer has used appropriate non-discriminatory criteria for selecting those who are granted furlough leave it is possible for them to make this decision. Some employers may only need certain teams to be available or may need a lower number of people in each team to keep the business running smoothly whilst there is a reduction in the work available.

If you are concerned about the decision you could speak to them and ask them to reconsider their decision not to allow you to take furlough leave or ask them to rotate those on furlough leave so that everyone gets a turn.

The work my employer does has stopped due to COVID-19 and the company has suggested it may become insolvent. What is going to happen to my job?

Your employer may face insolvency if it cannot pay its debts. They might explore making you redundant, ask you to keep working until a solution can be found or transfer you to a new employer under TUPE (if the business has been sold).

Depending on your situation, if the company does not have any money to pay you what you are owed you may be able to apply to the government for a redundancy payment, holiday pay, outstanding payments including unpaid wages, overtime and commission and any money you would have earned working your notice period.

You may also be eligible for unemployment benefits if you lose your job. If you do not apply for benefits after you lose your job you might get less money in your statutory notice pay payment.

I already have more than one job. One of my employers is placing me on furlough leave but my other employer still has work for me to do. Is this ok?

Yes. Your employment with each employer is treated separately. You can be furloughed from each job separately or continue to work for one employer whilst being on furlough leave from the other.

I was affected by the school closures and chose to take unpaid leave from my job to care for my children. Can I now be put on furlough leave instead?

Yes, as long as you were placed on unpaid leave after 28 February 2020; i.e. the unpaid leave was connected to the COVID-19 pandemic and was not for some other unconnected reason.

It is possible, however, that your employer may be reluctant to do this and you cannot force them to put you on furlough leave. They may look to discuss options including taking holiday or unpaid leave instead. If this affects you we would recommend you seek specific advice on your situation.

I am being placed on furlough leave but my financial situation is tight. Can I apply for another job with a different employer whilst on furlough leave to top up my income?

Yes, as long as it doesn’t conflict with your current role.

You remain an employee of your first employer and must follow any specific clauses in your contract of employment concerning alternative employment.

You should also remain willing and able to work during your furlough leave so should not commit yourself to paid employment which you cannot get out of during your normal working hours.

However, if you could potentially do both jobs at the same time if you needed to, this would seem to be ok under the rules of the Scheme. It would be no different to having already had two jobs before this situation started. For example, if you normally work 9am – 5pm you could take on a new role working 7pm – midnight in a supermarket. We would recommend you kept careful records of any new employment you start as HMRC will see you have been receiving income from a different source during your furlough leave and may choose to investigate it.

It is possible that your employer could also consent to you working for another company during your normal working hours but you’d need to be able to end this and return to work as normal when your furlough ends so in practice this might not be possible.

What will I be paid if I am placed on furlough leave?

This will depend on the agreement you reach with your employer. You should receive a minimum of 80% of your “wage” costs under the Scheme, up to a maximum cap of £2,500 per month. This is the amount your employer can claim back from the government. Your employer can choose to top up this amount to your full normal wage, or may agree a different arrangement with you.

“Wage costs” is based on your normal basic salary. The Scheme does appear to include allowances and premiums. Please see the separate questions below covering how overtime and commission are treated under the Scheme.

If a particular payment is not covered by the Scheme as a “wage cost” your employer can choose to pay you an amount equivalent to it but is not obliged to. If the payment is a contractual payment and is not purely discretionary then if they decide not to pay it to you whilst you are on furlough leave they would either need to obtain your consent or go through a consultation process with you before they do this as it is a change to your terms and conditions of employment.

I normally work overtime every month to top up my basic salary. Will I still receive this if I am placed on furlough leave?

The position on overtime is unclear. HMRC have three published guides – a guide for employees, a guide for employers and the Treasury Direction setting out the rules they are using to administer the payment portal (the legal document).

The guide for employees refers to “past overtime” and the Treasury Direction refers to “regular salary or wages”. Both seem to suggest that where employees regularly worked overtime in the past this should be treated as “wage costs” and the employee would be treated as a person with variable pay and their payment calculated based on the previous year’s pay in that month or an average over the past 12 months.

However, the guide for employers uses the same wording as it does for commission and suggests that only “non-discretionary overtime” can be considered as “wages” under the Scheme. This is a narrower definition and would not cover discretionary payments. This could be interpreted to mean that if you regularly work overtime and it is guaranteed as part of your contract of employment then your wages should be calculated taking it into account but any discretionary overtime would not be included but it is unclear how they will access “non-discretionary” and “discretionary” overtime.

The position is therefore very unclear. We recommend you speak to your employer about how they are planning to treat any overtime payments and seek specific advice about your situation if you are unhappy with their response.

I normally receive an annual bonus payment. Will I still get this payment?

Your employer will not be able to recover bonus payments through the Scheme.

If you have a contractual right to a bonus then your employer should either pay this to you as required or ask you to consent to forgo or delay the payment. If any bonus payment is discretionary your employer is not obliged to pay you a bonus and can choose not to do so without having to ask for your consent.

My basic salary is low but I receive regular commission payments. Will I still get these payments?

Whether or not you receive your commission payments through the Scheme will depend on whether it is compulsory commission or a discretionary payment.

The government has issued updated guidance which confirms that compulsory commission payments can be claimed back as “wage costs”. We presume that this means you will be treated as an employee whose pay varies. The guidance does not expressly say this; however, we think this must be the intention of the scheme (and would be a fair application of the scheme in our view). It is also supported by the employee guidance which says:

The grant paid to your employer will be calculated based on your regular, contractual pay, such as wages, compulsory commission and past overtime. The calculation will not include discretionary commission (including tips) payments or bonuses, non-cash payments or benefits in kind.

It is important to note, however, that the commission has to be compulsory, so you have to have a contractual right to the payment and it will not cover you if your commission was purely discretionary.

There is however a potential conflict between the guidance and the HMRC Direction, The HMRC Directions appears to exclude payments which are conditional on something. Most commission payments are conditional, for example the commission paid to a car salesman is conditional upon that person selling cars. However, taken to its extreme, virtually all payments made to employees are conditional upon something, for example payment of salary is conditional upon the employee being ready and available for work, and so it is unclear what the requirement that the payment can’t be conditional actually means.

As there is still some uncertainty in this area we hope there may be further guidance from the government shortly.

If your commission is not compulsory and is not covered by the Scheme, your employer can choose whether it pays these itself or limits its payments to those it can recover under the Scheme. However, if they do not intend to pay these additional amounts they will need to ask for your consent or go through a consultation process with you as it is a change to your terms and conditions of employment.

My gross monthly salary is above the £2,500 cap set by the government. What will I be paid?

This will depend on your employer. As they can only recover 80% of your wage costs from the government, up to the £2,500 cap, they can decide whether they want to top up your wages to 100% or not. If they do not intend to pay these additional amounts they will need to ask for your consent or go through a consultation process with you as it is a change to your terms and conditions of employment.

If my employer pays me 80% of my normal basic wage I will receive less than national minimum wage based on my normal working hours. Is that ok?

The government guidance confirms that employees on furlough leave do not need to be paid national minimum wage (NMW) with reference to their normal working hours as they are not actually working. Therefore, if you are not working, the number of hours you are deemed to have worked for the purposes of calculating the national minimum wage will be zero. However, if you undertake any online training then they must be paid the NMW in respect of those training hours.

Do I have to wait to be paid until my employer has received the money from the government under the Scheme or will I be paid as normal?

No. Your employer should pay you as normal under your contract of employment. They can then claim back the amount they are due from the government under the Scheme to reimburse their costs. Given that the online portal is now active, employers can make a claim for your wages and should receive the grants soon.

I work variable hours each month. What will I be entitled to?

For staff who work variable hours, you are entitled to either the pay you received in the corresponding month last year or the average earnings for the previous 12 months (whichever is higher). If you haven’t worked for the employer for a full 12 months your entitlement will be calculated on the basis of your average earnings to date for your employer.

I am currently on maternity leave, can my employer end my maternity leave and place me on furlough leave?

Your employer can’t force you to end your maternity leave and place you on furlough leave. It is, however, possible to remain on maternity leave and also be placed on furlough leave without it bringing your maternity leave to an end but only if you are getting enhanced maternity pay from your employer.

If you are receiving enhanced company maternity pay, your employer could place you on furlough leave and claim back 80% of your enhanced company maternity pay through the Scheme.

If you are only receiving statutory maternity pay, or have exhausted your enhanced company maternity pay, then your employer cannot put you on furlough leave and pay you 80% of your normal salary without you ending your maternity leave.

If you are thinking about returning to work you could serve notice to end your maternity leave and negotiate with your employer to be placed on furlough leave on your return to receive 80% of your normal salary through the Scheme. However, you would need to be prepared to return to the workplace if the furlough leave was ended. You normally need to give 8 weeks’ notice to return from maternity leave, although your employer could agree to waive this notice period to enable you to return sooner and be placed on furlough leave. Once you have ended your maternity leave you cannot return to it and you will lose any protection given to women on maternity leave so it is important to only make this choice if you are sure you are ready to return to work if required.

The same situation applies to any employees on paternity leave, adoption leave or shared parental leave

Can I claim benefits whilst on furlough leave to replace the missing 20% of my salary?

This will depend on the arrangements you meet with your employer and the salary you receive. It may be possible to apply for some means tested benefits but you should seek specific advice on this. You remain employed by your employer whilst on furlough leave and can’t claim benefits based on unemployment. If you make an application which does not follow the rules HMRC may investigate you for a fraudulent claim.

I am on a zero hours contract, can my company place me on furlough leave?

Yes. There was a lot of confusion over this point as the Government announcements and the guidance gave conflicting information but the updated guidance makes it clear that workers, who are paid through PAYE, can be furloughed and receive support through this Scheme.

If you on a zero-hour contract as either an employee or a worker your employer can recover 80% of your wage costs under the Scheme and you can be placed on furlough leave.

However, the status of those working under zero-hour contracts is a contentious area of employment law. If you are affected by it we recommend you seek specific advice on your situation to clarify your entitlements.

I am an agency worker, what are my rights?

If you were introduced to your employer by an agency but you are working under a contract of employment directly between yourself and your employer and your employer pays your wages directly then you may be covered by the Scheme. This will only apply if you are not working for your employer while you are placed on furlough leave.

If you are carrying out work for a company but you are on the pay roll of an agency rather than the company itself then the agency company may be your employer not the company you carry out the work for. In that situation the agency you work for can place you on furlough leave but the company you carry out the work for can’t.

I work for my own personal service company. I pay myself a minimum wage salary as an employee and receive dividends to top up my earnings. Can I include the dividend payments in the "wage costs" I claim through the Scheme?

No. You will be able to claim for 80% of your basic PAYE employee salary (subject to the £2,500 cap) but you will not be able to claim for the dividends you receive.

I am a company director. Can I be furloughed?

Yes, providing you don’t do anything other than take steps to fulfil your statutory obligations.

The updated guidance states that where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so. However, you must do no more than would reasonably be judged necessary for that purpose. For instance, you should not do work you would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company. But you can file accounts with Companies House, respond to legal issues or meet financial commitments.

If you would like guidance on the difference between statutory obligations as a director versus carrying out other activities please contact one of the employment team.

Our employer is saying we must use two weeks annual leave during the time we are on furlough. Can they do this?

It remains unclear whether an employer can require an employee to take holiday. If it is possible, then the normal notice provisions would still apply, of twice the period of leave that the employer is asking the employee to take. Therefore, to require an employee to take 1 week of holiday would require 2 weeks’ notice.

But to allow an employer to require an employee to take holiday is open to abuse. If the employer is topping up the employee’s wages from 80% to 100%, to require an employee to take holiday whilst on furlough is essentially asking them to give up holiday. To prevent this abuse we could see a situation whereby an employee can take holiday if they want, but an employer not being able to require an employee to take holiday. This is similar to the situation which applies where an employee is on sick leave. However, the ACAS guidance certainly doesn’t say this at the moment, and it would require further guidance, or legislation, from the government before this was the case.

In summary, for the moment, it appears from the ACAS guidance that an employer can require an employee to take holiday, by giving the appropriate period of notice, but this point is less clear as it could be open to abuse.

If you require any further or more detailed advice then feel free to contact any member of the employment team and we can arrange a telephone appointment to go through your particular situation.

Has any legislation been brought in for the Coronavirus outbreak that allows employers to cut employees' salary?

No, the rules and regulations brought in for the Coronavirus scheme do not give employees the right to cut employee’s pay. The main thing which has been brought in around employees is the furlough scheme, which gives employers the ability to claim back up to 80% of an employee’s pay where the employee has been furloughed (so sent home with no work to do). Employers can, if they choose, top up the employee’s pay to normal (i.e. 100%) pay. However if they don’t top up pay, then employees would need to agree both to go onto furlough leave in the first place, and would also need to agree to reduce their pay to 80%. This is made clear by the government’s guide to the furlough scheme which says “Employers should discuss with their staff and make any changes to the employment contract by agreement.”

Can employees refuse to take a pay cut?

Yes, employees need to agree to take a pay cut. If employees do not agree, and the employer still cuts their pay, then this would be an unlawful deduction of wages and the employee could bring a claim in the Employment Tribunal. You also can’t reduce the rate of pay below the National Minimum Wage. They could also resign and claim constructive dismissal, but resigning from their job may not, in the current climate, be a particularly attractive option.

However the furlough scheme was implemented as a way to assist employers to avoid redundancies. If employees do not agree to furlough leave, or do not agree to other measures such as continuing to work but on a reduced rate of pay, then the employer may be forced to make redundancies. Therefore in our experience of the last recession, employees often agreed to things such as pay cuts to avoid the risk of being made redundant.

What are employees' rights when a business cuts their pay? Is it different now during the crisis?

Normal employment law still applies, even during the current crisis. However if an employee refused to accept a pay cut then their employer could seek to enforce the change, by dismissing and offering re-employment on new terms. The employer, if challenged in the Employment Tribunal, would then need to justify that change. In the current climate, and the impact that the Coronavirus crisis is having on businesses, employers may well be able to justify the need to reduce pay. Therefore whilst employment law applies, it may well be easier for employers to justify things such as pay cuts than in times of economic growth.

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