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What is Furlough Leave?

Employment Law Solicitors

The Coronavirus Job Retention Scheme (CJRS) known as furlough leave is part of a package of business support measures to help save jobs. Furlough leave is temporary leave of absence and an alternative option to dismissing or laying off your employees.

  • You can claim for employees on any type of contract.
  • Employees cannot undertake any work at all on behalf of your company or any linked or associated organisation. This includes providing services or generating revenue.
  • You can only claim for furloughed employees employed on the 19 of March 2020 and who were on your payroll on or before the 19 of March 2020.
  • If you made employees redundant or they stopped working for you on or after the 28 of February 2020 you can re-employ them.
  • The new Extended CJRS can be claimed as long as your employees are employed on 30 October 2020.
  • Employers will only pay National Insurance and pension contributions for furloughed staff who are working flexibly for the hours not worked.
  • HMRC will reimburse 80% of furloughed workers wage costs, capped at £2,500 per month, plus employees National Insurance contributions and minimum automatic enrolment employer pension contributions. The percentage may be reviewed for February and March 2021.
  • The £2,500 cap can also include past overtime fees and come out of compulsory commission payments, but not discretionary bonuses.
  • Employers can choose to top the 80% up to full pay.
  • Payment can be backdated to 1st of March.
  • The furlough scheme has been extended until 31 March 2021.
  • Furloughed employees can work part time (flexible furlough) since 1 July 2020.
  • The minimum period for furlough leave is seven days.

The furlough scheme opened for claims on 20th of April.

Employers must submit information to HMRC confirming which employees have been put on furlough leave with details of their earnings, through the new online portal.

For expert advice on the Coronavirus Job Retention Scheme and furlough leave, contact our Employment Law team on 01273 609911, or email info@ms-solicitors.co.uk.

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