The government has now released clear guidance on which Employees are eligible for Furlough Leave, there are some changes from the FAQs that we released last week.
As we know, you can only claim for Employees that were on your PAYE payroll on or before 19th March 2020.
Employees hired after 19th March 2020 cannot be furloughed and claimed for in accordance with the Scheme.
Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are also eligible to be furloughed.
If your Employee has more than one job then they can be furloughed by each Employer individually as each job is separate. This also means that the Employee can be furloughed for one job but continue working for the other receiving their normal wage for that position.
Employees who can be claimed for:
There are a number of Employees that can be claimed for, exclusive of their contract type.
This does not mean you are re-employing them, more like putting them on extended notice, so when the Scheme ends then the Employee's contract with you terminates as expected.
This includes Employees that need to look after their children - the lack of childcare caused due to the coronavirus.
Where a fixed term Employee's contract ends because it is not extended or renewed the Employer will no longer be able to claim the Furlough grant for them.
Individuals (who are not Employees) who can be claimed for:
As well as Employees, the grant can be claimed for a number of other groups of individuals, assuming they are paid via PAYE:
Where the decision is taken to furlough a Director, this should be a formally adopted decision of the company, noted in the company records and communicated in writing to the Director(s) concerned.
In the event that a furloughed Director needs to carry out particular duties to fulfil statutory obligations owed to the company, they may do so provided they do no more than would reasonably be judged necessary for the purpose. They should carry out no work to generate commercial revenue, provide services or increase communications or marketing on behalf of the company.
The rights and duties of a member of an LLP are set out in an LLP agreement (in the absence of an agreement, default provisions are detailed in the LLP Act 2000), to furlough a member, the terms of the LLP agreement may need to be varied by a formal decision of the LLP. The reference salary for the Scheme is the LLP member's profit allocation, excluding any amounts which are determined by the LLP member's performance, or the overall performance of the LLP.
What can an Employee do while on Furlough Leave?
A furloughed Employee can take part in volunteer work, as long as it does not provide services to or generate income for the organisation.
A furloughed Employee can also work for another Employer as long as the hours they complete for the new Employer would not be breaching the hours of their current contract. (Essentially exactly the same arrangement as if the Employee took on a second job in normal circumstances).
Furloughed Employees can complete training for the company, as long as in undertaking the training the Employee does not provide services to or generate revenue for the company.
Where training is undertaken by furloughed employees, they are entitled to be paid their normal salary rate for the time they spend training (this is on top of their furloughed wage).