Overview of the furlough scheme as of March 2021
Furlough leave is basically being laid off work temporarily. It has been used by the government to enable employers whose business have been severely affected by the coronavirus pandemic to retain their employees. The furlough scheme is officially called the Coronavirus Job Retention Scheme.
The furlough scheme has been extended on several occasions over the last year. The latest extension was announced in the Budget on 3 March 2021 and will now continue until 30 September 2021.
This short guide to the furlough scheme very briefly outlines its main features and was updated in March 2021.
Furlough scheme pay
- Under the latest variant of the scheme (March 2021), 80% of an employee’s salary will continue to be paid for the hours employees can’t work during the pandemic, up to a maximum of £2,500 per month.
- Of this 80%, the government will expect employers to contribute 10% in July 2021 and 20% in August and September 2021, as the economy improves.
- For periods up to 30 April 2021, you have to have been on your employer’s payroll on or before 30th October 2020 in order to be furloughed. Your employer must also have made a Pay As You Earn (PAYE) Real Time Information (RTI) submission between 20 March 2020 and 30 October 2020, notifying a payment of earnings for you.
- In the newly extended furlough scheme – from 1 May 2021 – you need to have been on your employer’s payroll on or before 2 March 2021. In addition, your employer should have made a PAYE submission for you between 20 March 2020 and 2 March 2021.
- In order to claim furlough pay for you on or after 1 May 2021, an employer doesn’t also need to have claimed for you before 2 March 2021.
Eligibility for furlough scheme pay
The furlough scheme covers any employee, and not just employees who would otherwise be made redundant for lack of work.
This means that it can be used where the employee is self-isolating or shielding due to a fear of contracting or spreading coronavirus.
Roadmap of the furlough scheme
The scheme began in March 2020 and has now been extended to 30 September 2021. It has been through the following major variations:
1st March 2020 to 31st August 2020: The government contributed 80% of a furloughed employee’s salary up to a monthly cap of £2,500.
September 2020: The government contribution reduced from 80% to 70%, with a monthly cap of £2,190. The employer contributed the additional 10% (plus top up to 100% if that is what was agreed with you).
October 2020: The government contribution tapered down to 60%, with a maximum of £1,875 per month. The employer’s contribution was now an additional 20% (plus any agreed top up as above).
1 November 2020: The furlough scheme was extended until the end of April 2021 and once again contributing 80% to a furloughed employee’s salary, with a £2,500 monthly cap.
3 March 2021: The government decided to extend the scheme further, until 30 September 2021, continuing with an 80% contribution and £2,500 cap, but with the employer making a small percentage contribution as outlined earlier.
FAQs about the furlough scheme
What can I do if my employer refuses to furloughed me because I’m worried about covid-19 health and safety issues at work?
Some employers have been known to refuse to put their employees on the scheme if they are/were self-isolating because of fears that the workplace was unsafe to attend due to coronavirus.
If that is or was you, and you have suffered a pay cut, got no pay or even been dismissed as a result, then you may have a claim against your employer for breach of contract. unfair dismissal, constructive dismissal or other unfair conduct.
Also see our article on unfair dismissal, pay cuts and bullying resulting from coronavirus safety issues at work.
Remember that there are strict time deadlines of three months within which you need to submit any claim you may have against your employer. (See our article on time limits for making tribunal claims for further information.)
Do I have to agree to be furloughed?
Your employer has always been legally obliged to seek your agreement in advance of putting you on the furlough scheme. They can’t just tell you that you are being furloughed or force you to accept it. However, if you refuse(d) to agree, then your employer can make you redundant (see below).
Similarly, if you won’t agree to be paid anything less than 100% of your wage or salary, your employer can either top up your pay to 100%, or else again, they can make you redundant.
Under the furlough scheme, should I receive my full salary/wage or just a percentage of it?
During the current extension of the scheme (March 2021), the government is paying your employer 80% of your wage (capped at £2,500 per month for the hours you were on furlough).
But your employer is still legally obliged to top up the 80% and to pay you 100% of your wage unless they have your agreement to pay only 80%. You have the right not to accept 80% and to insist on 100%.
If your employer says they can’t afford to pay you 100%, and you don’t agree to wait until they can afford to pay you in full, then they can make you redundant, and pay you a redundancy package.
If you have no contractual redundancy package in your contract of employment, then you are entitled to statutory redundancy pay (maximum of £16,320 or £544 per week x 30 weeks – rates apply from April 2021).
What if the % government pay takes me below the national minimum wage?
Your employer does not have to top you up to national minimum wage if you are not actually working.
How does the scheme work if I have an irregular wage?
If your pay varies, your employer can claim for the higher of (i) the same month’s earning from the previous year (eg earnings from March 2019); or (ii) average monthly earnings in the 2019-20 tax year.
If I am self-isolating or on sick pay, can I be furloughed?
The official guidance on this is that an employer “cannot claim for employees while they’re getting Statutory Sick Pay, but they can be furloughed and claimed for once they are no longer receiving Statutory Sick Pay.” So once you stop receiving SSP, you can be furloughed (providing you meet the payroll and PAYE conditions outlined at the beginning of this article).
I am shielding, can I be furloughed?
Shielding is ‘a measure to protect people who are clinically extremely vulnerable by minimising all interactions between them and others. The government issued revised shielding measures in February 2021 to people who are shielding. And yes, you can be placed on furlough when shielding.
Can old/pregnant/vulnerable employees be placed on furlough leave, even though no-one else is being laid off?
Do the government percentage payments cover commission and bonuses?
Sadly the scheme does not cover fees, bonuses and commission. See also the next question about NI and pension payments.
Does the government pay employers’ national insurance and pension contributions?
From 1 November 2020, employers have paid employer National Insurance Contributions (NICs) and pension contributions for the hours the employee does not work.
Can I do any paid work when on the furlough scheme?
Up to 30th June 2020, you could not be doing any work whatsoever for your employer.
From 1st July 2020, ‘flexible furlough’ was introduced alongside full-time furlough, and this continues for the extended scheme.
Under the flexible furlough arrangement, you can do part-time work for your employer, and they should pay you 100% pro-rata of your wage/salary for that part-time work.
The furlough money your employer receives for you from the government will only be for the hours that you don’t work when compared with the hours you would normally have worked during that time.
If you are fully furloughed, you can’t do any work for your employer during the time you’re recorded as being on furlough.
Can my employer choose who to furlough?
Since the inception of the scheme, your employer has had the discretion on who to furlough – they can use any rational system to make their selection. For example, it could be based on an employee’s length of service.
But the Equality Act 2010 still applies, so selection can’t be done in a discriminatory way. Your employer could prioritise old and vulnerable people, even though this might be seen as discrimination against young people because age discrimination can be ‘justified’ in some cases.
Can my employer rotate people on furlough leave?
Yes, they can, but there is now no minimum number of weeks or days that you must be on furlough. (It was 3 weeks initially.) Having said that, employers making claims through the government portal usually have to cover periods of at least 7 days (excluding the first or last few days in a month).
Can my employer require me to take holiday when on furlough leave?
Yes, so long as they give you twice as much notice as the length of the holiday. For example, if they want you to take 1 week off, they need to give you 2 weeks’ notice.
Does my holiday continue to accrue during the time I am furloughed?
Yes, as you are still employed and you have a right to the statutory minimum of 5.6 weeks per year)
What if I no longer want to be on the furlough scheme, but to take redundancy instead?
You can apply for redundancy pay if you have worked for your employer for 2 years or more. The 2 year qualification period includes the time you were furloughed. (See gov.uk article on furlough and redundancy for more.)
Could I be made redundant after I’ve been furloughed?
Yes you could, providing your employer followed proper procedures for redundancy – see our redundancy guide for more about this. You might like to try our Virtual Lawyer letter writer service to create a letter to your employer if you were/are facing redundancy or have recently been made redundant.
Also note that there is now legislation in place which requires your employer to calculate your redundancy pay based on your pre-furlough wages or salary, rather than on your reduced furlough pay.
Does the furlough scheme apply if I’m on a zero-hours contract?
Within the payroll and PAYE dates outlined earlier, the scheme should cover most – but not necessarily all – people on zero-hours contracts.
Can I ask for a pay rise to top up furlough pay, so I still get the same money as before?
You can ask, but your employer is under absolutely no obligation to give you such a pay rise.
Could I be disciplined or carry on my grievance whilst on furlough leave?
Your next steps
If you are having problems at work with such issues as absence, pay, dismissal or other matters arising from the covid-19 pandemic, Monaco Solicitors can help.
- Our other coronavirus-related guides are listed below and will give you a better understanding of your employment rights and practical guidance.
- Our free Virtual Lawyer letter writer is really easy to use and creates a legal letter addressed to your employer about a variety of employment problems, including those related to coronavirus.
- If you would like legal advice and/or would like to find out what options exist for having a lawyer undertaking some or all of your case (including on a no win no fee basis), please request a free consultation.