Furlough Update 6 April 2020

Furlough update – 6 April 2020!!

On 4 April 2020, the government announced yet further guidance to Furlough, clarifying points that many employers were asking, since the introduction of the Job Retention scheme a couple of weeks ago.

Please see update to the Coronavirus Job Retention Scheme, but below we set out the main points clarified:

Can employees on furlough, start a new job?

Yes, they can! This is so long as it is allowed, under the contract of employment of the job from which they are being furloughed from or indeed if that employer gives them consent to do so. In theory a furloughed employee could get 80% of their existing salary and 100% of their new salary at the same time. Therefore if employers have staff that are continuing to work and with some that are on the scheme, careful consideration will have to be given as to whether to allow furloughed staff to take additional jobs, given that those on the scheme could be potentially better off than those who have to continue work for that employer, possibly on reduced pay.

Can we rotate employees on furlough?

Yes, so long as each period of furlough is at least 3 weeks. So in theory, you could have an employee on furlough, back to work and furlough again.

Are there any requirements about furlough status notification?

This latest guidance has made it clear that employees on furlough must be notified by their employer in writing and a record of that notification must be kept for 5 years.

Does the 80% include non-monetary benefits?

No non-monetary benefits such as the value of car or health insurance are not included.

What about commission?

The guidance now makes reference to the fact that an employer can reclaim 80% of compulsory commission as well as basic salary. (Compulsory commission we understand to mean contractual!) It must also therefore  mean by implication in respect of past commission (as the employee cannot not earn commission whist on furlough as they cannot do any work).

What about Company Directors?

The guidance has confirmed that they can be furloughed, if they are on the payroll. They obviously cannot work for the employer, but they can continue to perform their statutory duties.

 

We appreciate that the guidance on this scheme has come out in a drip feed format from the government, as and when they can clarify we will update you. In the meantime if you have any questions please contact our Head of Employment, Ami Naru.

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