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

When did the CJRS start? For how long will the it last?

The original scheme has been open since 1 March 2020 and was due to expire on 31 May 2020, but was subsequently extended until 31 October 2020, with the scheme to taper off from 1 August.

    However, the CJRS has now been further extended until 30 September 2021. 

    To whom does the extended scheme apply?

    The extended scheme is open to all employers, whether their business remains open or closed, 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 30 October 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 extended scheme cover all employees and workers?

    For claim periods up to 30 April 2021, as long as workers were employed and on your payroll on 30 October 2020, then they will be eligible for furlough leave. 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.

    However, if the employee did not start their furlough leave before 1 December 2020, the employer will not be able to claim a grant for any days during which the employee is serving a period of notice (whether statutory or contractual).

    For periods starting on or after 1 May 2021, as long as workers were employed and on your payroll on 2 March 2021, then they will be eligible for furlough leave.

    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 under the extended CJRS for the claim period up to 30 April 2021 will not apply to employees who were employed after 30 October 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.

    For periods starting on or after 1 May 2021, workers who were employed after 30 October 2020 and remain on your payroll on 2 March 2021 will be eligible for furlough leave.

    The Treasury Direction confirms that if you have acquired employees on or after 1 September, you can still furlough them on or after 1 November.

    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 22 September 2020 can be rehired and then furloughed.

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

    For any claim period up to 30 April 2021:

    • if the employee was employed on or before 19 March then the 80% figure will be based either:
      • on earnings payable in the last pay period on or before 19 March 2020 (if earnings are fixed), or, 
      • the higher of (i) the earnings in the same pay period in the previous year (or, in the March 2019 or April 2019 pay periods if the claim is for March and April 2021), 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 (if earnings are variable). 
    • If the employee started their employment after 19 March 2020, then the 80% figure will be based on either:
      • the earnings payable in the last pay period on or before 30 October 2020 (if earnings are fixed), or, 
      • the average earnings in the period between their start date or 6 April 2020 (whichever is the later) and the day before their furlough begins.

    For all other employees who were on your payroll on 30 October 2020, the reference period is the last pay period ending on or before 30 October 2020; this will only apply for periods starting after 1 November 2020.  

    Employees who started employment between 31 October 2020 and 2 March 2021 can be furloughed from 1 May 2021. Details of how their wages will be provided in updated guidance in due course.

    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 extended 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 under the extended scheme, employers must have reached an agreement, in writing, with their employee (or reached collective agreement with a trade union) that he/she will be furloughed and will either do no work or will work reduced hours during the period of the furlough. A record of this agreement must be kept for five years.

    An agreement to furlough must be made before the date the furlough period begins. The only exception to this rule is that an agreement entered into on or before 13 November can be backdated to 1 November 2020.

    Employers are required to submit information about furloughed employees to HMRC via the online portal. Detailed information on how to claim and the applicable deadlines, is contained in the latest HMRC guidance. 

    The minimum number of days for each claim period (calendar month) is seven days. The deadlines must be met as late claims may not be accepted. Note that if the employee did not start their furlough leave before 1 December 2020, the employer will not be able to claim a grant for any days during which the employee is serving a period of notice (whether statutory or contractual).

    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 Guidance for the extended scheme 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 “whose employment activities have been adversely affected by the coronavirus or coronavirus disease or the measures taken to prevent or limit its further transmission”.

    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 Direction for the extended scheme requires employers to have reached an agreement, in writing, with their employee (or reached collective agreement with a Trade Union) that he/she will be furloughed on either a full or flexible basis during the period of furlough. The agreement must be made before the date the furlough period begins (the only exception to this rule is that an agreement entered into on or before 13 November can be backdated to 1 November 2020) and a record of the agreement must be kept for five years. If there is no agreement and/or any agreement does not comply with the rules, the extended CJRS will not apply and the employer will not be able to claim the subsidy. An existing lay-off clause in the contract of employment has no impact on the eligibility rules of the extended scheme – an employer will not be able claim from the extended scheme for an employee who has been furloughed without their agreement.

    What if my staff do not agree to be furloughed?

    The extended scheme requires a written agreement to furlough. Therefore, if staff refuse to be furloughed, then you cannot claim the subsidy under the extended scheme.

    An existing lay-off clause can be relied on if employees are unwilling to agree to furlough. However, this would trigger the statutory right to a redundancy payment which applies after a certain period of lay-off. 

    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 have an employee who has asked to be furloughed as she is shielding in accordance with public health guidance. Another has asked to be furloughed as he has to stay at home to look after his children due to school closures. Do I need to furlough them?

    An employee who is shielding in line with public health guidance is entitled to SSP. The Direction for the extended scheme confirms that employers can take the employee off SSP in order to furlough him/her. There is no obligation on the employer to deduct the amount of any SSP for which the employee is eligible from its claim under the CJRS, even if the employee is not claiming that SSP.

    If employees are unable to work, including from home, due to caring responsibilities arising from Covid-19, such as caring for children who are at home as a result of school or childcare facilities closing, or caring for a vulnerable individual in their household, then they can be placed on furlough.

    There is no obligation to place such staff on furlough, however.

    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?

    Under the extended scheme, employees can be furloughed on either a full or flexible basis. During any period or hours they are recorded as being on furlough, 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.

    Employees can however take part in training, volunteer for another employer or organisation and/or work for another employer (if their contracts allow this).

    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?

    Under the new scheme, 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, 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. 

    Employers can also require an employee to take annual leave while furloughed, provided you follow the usual notice process and make a top-up of salary.

    However, the Guidance for the extended scheme confirms that “employees should not be placed on furlough for a period because they are on holiday for that period.” In other words, an employer should not furlough an employee instead of letting them take their pre-booked annual leave as a means of avoiding having to top-up pay.

    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. There is no minimum furlough period and no limit on the number times the employee can agree to be furloughed. However, the minimum claim period is seven calendar days.

    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 be placed on furlough leave for a period that starts on or after 1 November 2020?

    Yes, although eligibility will be subject to the normal rules of the scheme.   

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

    ACAS has published 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. We would therefore 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?

    An employee cannot be on sick leave and furlough simultaneously as an employer cannot claim for both SSP and a grant under the extended furlough scheme.

    However, an employer can decide to move an employee who is on sick leave onto furlough and to place an employee who falls sick during furlough leave on SSP.

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