Latest Update on Furlough Scheme

Overnight the government has published further details of the Furlough Scheme in what we presume is an attempt to address the increasing number of queries the previously published guidance left unanswered.

On Thursday 26 March 2020 we broke the news that the government would be publishing further details on the Coronavirus Job Retention Scheme, aka the Furlough Scheme, which they duly did on Friday 27 March 2020.

This latest update does go some way to providing much more clarity for Employers, but many areas remain unclear:  What do ‘statutory duties’ actually cover for company directors?  Are employees who TUPE into a business after 28 February covered?  Can employees take annual leave when on furlough, and what should they be paid?

We hope there is further clarity provided in the coming days but in the meantime, here are the latest updates provided overnight:

• CLARIFIED:  employees can start a new job when on furlough (meaning they might end up earning 80% of the old salary and 100% of a new one).  This was not prohibited in the earlier guidance, but the new guidance expressly allows it.  The guidance does say it has to be allowed under the old employment contract, but presumably the old employer can waive that.
   
• CLARIFIED: an employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary.  This is good news for car salesmen and estate agents.  But it can only be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough.
   
• CHANGED: employers can reclaim 80% of fees (whatever that means) from HMRC.  The previous guidance said they could not.
   
• CLARIFIED: the 80% does not include non-monetary benefits (eg the value of health insurance or a car).
   
• CLARIFIED (although we all knew this anyway):  Company directors can be furloughed. They can still perform their statutory duties, but not other work for the company.
   
• CONFIRMED: Employees can be furloughed multiple times, ie they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)
   
• NEW: Employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep the record of that written notification for five years.

The HMRC Portal is still not live but is expected to be available to Employers by the end of April.  Full details here: Coronavirus Job Retention Scheme.

Once we have more information, we’ll update our website so bookmark our site and keep checking for updates.

Support for Employers

If you are an employer affected by any of the issues being created by the outbreak of Coronavirus and require further assistance and support, call us now on 0800 612 4772 or Contact us via our website.