We have put together these FAQs for employers in sectors such as healthcare, social care, emergency services and housing and, therefore, some questions may not be relevant for your particular sector.

Coronavirus Job Retention Scheme

For how long will the CJRS last?

The scheme opened on 1 March 2020. The scheme was originally to expire on 31 May 2020 but was subsequently extended by a month to 30 June 2020. The Chancellor announced in Parliament on 12 May that it was to be extended further until 31 October 2020. On 29 May, the Chancellor announced that the scheme will taper off from 1 August, as follows:

  • From 1 August employers are required to pay employee national insurance contributions and pension contributiuons, and will not be able to reclaim them from the scheme.
  • From 1 September, the CJRS will only meet 70 % of salary (up to a maximum of £2,190). Employers will have to top up to 80% (or more, depending on what has been agreed with the employee).
  • From 1 October, the CJRS will only meet 60 % of salary (up to a maximum of £1,875). Employers will have to top up to 80% (or more, depending on what has been agreed with the employee).

The Government also announced that the CJRS closed to new entrants from 10 June i.e. no employees can be furloughed after this date if they have not been furloughed previously. However, employees who return from maternity, paternity, adoption or shared parental leave can be furloughed after this date, provided that their employer has previously used the CJRS.

Since 1 July, it has been possible to bring furloughed employees back to work on a part-time basis. Further details are set out in the factsheet that the Government published on this and the self-employment income support scheme

Additional guidance on flexible furloughing and how to calculate claims was published on 12 June.

The portal by which employers submit claims under the scheme went live on 20 April. Employers are required to pay their employees’ salaries and wait to be reimbursed by HMRC (unless they can reach agreement with an employee to defer payment).

To whom does the scheme apply?

The scheme is open to all employers so long as they have a UK PAYE payroll scheme that was registered on HMRC’s real time information system for PAYE on or before 19 March 2020, and have a UK bank account. Although the scheme is available to public sector organisations, the government expects that few public sector organisations will furlough employees as the majority of their staff will be providing essential public services or contributing to the response to the COVID-19 outbreak. Furthermore, where organisations are receiving public funding for staff costs (including non-public sector organisations), they are not expected to furlough staff. 

Even after redeployment has been considered, some public sector organisations may find that some workers are less busy but the CJRS does appear to make clear that HMRC would be reluctant to approve a claim by a public sector organisation. For now, such organisations should continue to review their workforce arrangements as part of the response to COVID-19. In the case of casual workers, they should be assured that there may be shifts available at some point where they could be needed, albeit this may be in slightly different types of roles. NHS workers may be able to undertake shifts for NHS 111.

Does the scheme cover all employees?

As long as workers were on your payroll on 19 March 2020, then they will be eligible for furlough leave (the original Treasury Direction changed the cut-off date from 28 February after extensive lobbying). This could include employees on fixed-term, flexible or zero-hours contracts, or those on agency contracts where the employer pays the worker through its payroll. The scheme is open to foreign nationals and grants under the scheme are not treated as “access to public funds”, meaning that being placed on furlough will not impact on any visa conditions.

The Government has announced separate measures for the self-employed and for contingent workers.

Does it apply to staff who have not yet commenced employment or commenced recently?

The Government has confirmed that furlough leave will not apply to employees who were employed after 19 March 2020 (although see below regarding re-hiring employees). However, if you have acquired employees after this date as a result of a TUPE transfer, or have consolidated your payroll with the effect that some employees join the payroll after this date, you will be able to place affected employees on furlough.

The 12 June guidance confirms that if you have acquired employees after the 10 June, you can still furlough them on or after 1 July, but only if the previous employer had done so for at least one three week period between 1 March and 30 June.

I have recently made some staff redundant? Will I be able to rehire them and immediately place them on furlough leave?

Employees who have been made redundant or whose employment has otherwise terminated since 28 February 2020 can be rehired and then furloughed.

How is the 80% figure calculated? What is meant by regular wages?

The 80% figure will be based on the higher of (i) the earnings in the same pay period in the previous year, or (ii) the average earnings in the previous 12 months (or less if they have worked for a shorter period), and is capped at £2,500 gross per month. Employers will also be able to claim the associated employer national insurance contributions and the minimum automatic enrolment employer pension contributions on that subsidised wage (i.e. not on the employee's usual salary). Included in the calculation of earnings are regular contractual payments such as wages, compulsory commission and past overtime (presumably payments in respect of overtime before the employee was furloughed), together with any variable payments such as overtime or shift premia, provided there is no discretion as to how such payments are calculated. The calculation will not include discretionary commission (including tips) or bonuses, non-cash payments or the value of any benefits in kind. It also does not take account of any salary sacrifice arrangements.

Am I required to top up my employees’ wages beyond 80%?

No, this is not required by the CJRS, although employers can choose to top up wages if they wish to do so. However, employers are required to abide by normal employment law principles when furloughing employees, including in relation to changing terms and conditions of employment. Therefore, where there is no contractual right to lay-off staff, it will be necessary for employees to agree to being placed on furlough leave which should be evidenced in writing (see below).

How do I obtain reimbursement from HMRC?

To be eligible for the subsidy employers should agree in writing with the employee that he/she has been furloughed. A record of this agreement must be kept until June 2025.

Employers are required to submit information about furloughed employees to HMRC via the portal and can submit a claim once every three weeks. Detailed information on how to claim is contained in the latest HMRC guidance. A record of all the claims information submitted must be kept for 6 years.

My workers are paid the National Minimum Wage (NMW). Will I have to top up the Government contribution to ensure their wages do not fall below NMW limits?

No, workers will not be entitled to the NMW as they will not be working. If they do any training whilst on furlough leave, this must be paid at NMW levels.


Which staff can be furloughed? Does it only apply where the employee has no work to do and/or would otherwise be made redundant?

The Treasury Direction and latest Guidance make clear that there does not have to be a potential redundancy situation in order for an employee to be furloughed. The Direction states that the scheme is available to anyone who is furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”.

Can my staff insist on being furloughed?

No, the decision whether or not to furlough staff rests with the employer.

Can I force my staff to be furloughed? Does it make a difference if their contracts of employment contain a lay-off clause?

The Government has made clear that placing an employee on furlough leave is subject to the usual employment law rules. If, as is likely to be the case, it represents a change to the employees’ terms and conditions of employment, then the employees’ agreement will need to be sought. If the employer chooses to top up the 80% payment so the employee receives full salary, then the risk of a breach of contract/constructive dismissal claim will be minimised, unless the employee argues that they have an implied right to work and are losing money by being forced to remain at home e.g. they are not earning commission.

An existing lay-off clause means it is likely that furloughing will not be a change to terms and conditions and will not require agreement. The wording of the clause should be reviewed, however, to ensure it is wide enough to cover the particular circumstances. It should also be made clear to employees that they are being furloughed under the CJRS rather than being laid off, so as not to trigger the statutory right to a redundancy payment which applies after a certain period of lay-off. We would advise that employees’ consent is always sought prior to them being furloughed, even where there is a lay-off clause, and the lay-off clause can be relied on if employees are unwilling to agree to the change.

The Direction suggests, however, that employees must agree in writing to be furloughed in order for the CJRS to apply and therefore relying on an existing contractual right may be risky. This requirement did not appear in earlier versions of the guidance, however, where the obligation was only to notify the employees in writing that they had been furloughed, and many employees will have been furloughed without written agreement prior to the publication of the Direction. The latest guidance requires that any flexible furlough arrangements must have been agreed with the employee (or reached a collective agreement with a trade union) and that a written agreement confirming the arrangement must be kept. It remains to be seen whether a written agreement will be required in order to access the scheme where the employee is furloughed on a full (rather than flexible) basis.

What if my staff do not agree to be furloughed?

If staff refuse to be furloughed, then you may have to consider dismissing and re-engaging them on new terms that include the right to place them on furlough, or laying them off, if you have the contractual right to do so. The other possibility is that they will be redundant. A fair process will have to be followed, and there are potential risks of claims for unfair dismissal/breach of contract.

I need to furlough more than 20 employees. Will I have to consult collectively with employee representatives?

The collective consultation requirements under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) are triggered where an employer proposes to dismiss 20 or more employees at one establishment over a certain period. Consulting with employees with a view to seeking their agreement to furlough leave does not constitute a “proposal to dismiss” and therefore the collective consultation requirements are not triggered. However, if agreement is not reached, and you need to consider dismissing and re-engaging 20 or more employees, or making them redundant, then the TULRCA requirements will be triggered.

I do not need to furlough all of my staff. How should I determine who will be furloughed?

There are no fixed requirements, however, it would be sensible to apply some objective selection criteria, in the same way as you would for a redundancy exercise, to avoid any argument that employees have been selected for a discriminatory reason. You could also consider rotating staff in and out of furlough (see below).

I want to protect my vulnerable workers such as older workers or those with a disability, and select them to be furloughed in priority to the remainder of my workforce. Could this be unlawful discrimination?

This is potentially discriminatory. Employers would need to be able to satisfy a tribunal that this was a proportionate means of achieving a legitimate aim. Whilst it might be a legitimate aim to seek to protect vulnerable workers, an employer would need to be able to produce evidence that there was not a less discriminatory way of achieving this aim. Each case will therefore turn on its own facts.

Can my employee be “partially” furloughed and continue to undertake some duties for me?

It is a condition of the scheme for claim periods up to 30 June that the employee has been instructed by the employer to cease all work in relation to their employment. This means that employees must not carry out any work for or on behalf of their employer or for any linked or associated organisation, including providing services or generating revenue, whilst they are on furlough leave. However, from 1 July a flexible furlough scheme was introduced, which allows employers to bring furloughed employees back to work for any amount of time and any shift patterns, while still being able to claim under the scheme for the hours not worked.

I have a shortage of workers due to increased demand caused by the Covid-19 crisis. Can I temporarily engage staff who have been furloughed by another employer?

The Government has confirmed that an employee can take up a new role with a second employer whilst furloughed from the first employer. This is subject to there being any prohibition on taking other employment in the employee’s contract of employment with the first employer, or in the furlough agreement. We recommend that where contracts of employment prohibit staff from undertaking employment elsewhere, organisations which furlough staff should confirm with employees that this clause will continue to apply and that they should not accept paid work elsewhere. If no such clause exists, employers may wish to include this as a condition of the furlough agreement.  

Many employees will not be bound by such terms and where organisations wish to take on an employee who is furloughed from another employer, they should ensure that the employee is not contractually prevented from doing so as otherwise they would be at risk of a claim for procuring a breach of contract. The employee should also consider any potential tax consequences of taking up a new role.

NHS Employers has advised that NHS organisations should consider engaging workers furloughed from another organisation on an unpaid voluntary basis if possible.

What about annual leave that is prebooked during a period of furlough leave? Can the employee still take it?

Yes, it has now been confirmed that an employee can take annual leave during furlough leave and that it should be paid at full pay, i.e. the employer will need to make a top-up of salary. 

What is not clear, however, is whether an employer will be able to require an employee to take annual leave while furloughed, as arguably the proper purpose of annual leave, i.e. to provide rest for the employee, cannot be fulfilled.

Will employees continue to accrue annual leave whilst they are furloughed?

Yes, employees will accrue annual leave in the usual way as the contract of employment continues and, therefore, the rights under it will continue to accrue.

What rights will an employee have while furloughed?

Employees that have been furloughed have the same rights as they did previously so that will include maternity rights. HMRC has confirmed that there is no entitlement to statutory sick pay (SSP) while furloughed.

I wish to furlough a pregnant employee. Will her maternity pay be reduced to take into account the period spent on furlough? 

No. the Government has confirmed that maternity pay will continue to be calculated according to the employee’s usual pay and will not be adjusted to take into account the lower rate of pay during furlough.

Can I “rotate” furloughed workers so that employees take turns to be working/on furlough leave?

Yes. Furlough leave for the period up to and including 30 June was for a minimum three-week period so it was not possible to rotate employees more frequently than that. Employees who have returned from a period of furlough leave can be placed on furlough leave for a second or subsequent period. Since 1 July, there has been no minimum furlough period and no limit on the number times the employee can agree to be furloughed.

We have an employee who works part time for us and part time for another employer. That employer is placing the employee on furlough leave? Can he continue to work for us, or do we need to furlough him as well?

As these are two entirely separate employments, then it is possible for an employee to be placed on furlough leave by one employer and continue to work for another. 

Can employees undertake voluntary work for their employer whilst on furlough leave?

Employees can carry out volunteering or training, provided it does not generate any money for the employer.

Can employees return from maternity leave early and then be placed on furlough leave?

Under the Maternity and Parental Leave Regulations, employees must give 8 weeks’ notice of their intention to return early from maternity leave. However, the employer and employee can agree that a shorter notice period, or no notice, can be given. Therefore, it is possible for an employee to curtail her maternity leave and be placed on furlough leave.

Can employees returning from statutory parental leave after 10 June  be placed on furlough leave for the first time?

Yes.  You may do this provided that the employee started their parental leave before 10 June,  they were on your PAYE payroll on or before 19 March 2020, and they are not the first employee you have furloughed under the scheme.  

Can I continue with disciplinary or grievance proceedings while an employee is furloughed?

ACAS has published new guidance which sets out best practice on handling disciplinary and grievance proceedings during the coronavirus crisis. This guidance is found here. The guidance is slightly problematic in that it suggests that employees can chair/take notes at hearings, or give witness statements/act as a witness – however this would seem to amount to providing services to the employer which is clearly prohibited during furlough by both the Treasury Direction and the HMRC guidance. Similarly, the ACAS guidance suggests that grievance and disciplinary proceedings can continue where the employee agrees to these “voluntarily” – it is not clear what this means and few employers are likely to submit to a disciplinary process voluntarily. It is to be hoped that further guidance will be issued to clarify these points, and in the meantime we would advise proceeding extremely cautiously whilst employees are furloughed.

Can we carry out collective consultation whilst employees are on furlough leave? What about employee representatives? Will they be treated as working and therefore unable to be furloughed?

You will be able to consult with employees whilst they are on furlough leave, where required, under the collective consultation regulations and TUPE. The Government has confirmed that employee representatives can carry out their duties whilst on furlough.

Given the Government’s advice on social distancing, we recommend that collective consultation takes place remotely where possible with the use of virtual meeting facilities and email and telephone for questions and answers.

If we dismiss employees as redundant now, will the dismissal be unfair if we do not offer them furlough leave first?

This would be for an Employment Tribunal to decide, but as an employer is obliged to consider alternatives to redundancy, it is likely that a failure to consider and offer furlough leave could affect the fairness of the dismissal. One exception could be where the employer will be unable to pay the employees’ salaries whilst awaiting reimbursement for HMRC, in which case furloughing might not be a viable option.

Can we place an employee on furlough if they are on sick leave? What if an employee falls ill whilst on furlough leave?

There is some conflict between the Treasury Direction and the guidance on this point. The guidance suggests that an employee can be placed on furlough leave whilst on sickness absence. However the Direction states that an individual cannot be furloughed until the SSP period has ended.

An employee who falls sick during furlough leave can either be placed on SSP or can continue to be furloughed. An employer cannot claim for SSP and for a grant under the furlough scheme.

If you have any questions regarding any of these issues please contact Nicola Green or Sarah Parkinson.