What is 'furloughing' staff?

'Furlough' means temporarily laying off staff for a period of time whilst keeping them on the payroll.

What financial support is provided?

The Government will provide a grant to cover "the lower of 80 per cent of an employee's regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included".

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Which employers can access the scheme?

All UK employers with a PAYE payroll scheme on February 28, 2020 can 'apply' to use the scheme.

Which categories of staff can benefit?

Employees on the PAYE payroll at February 28, 2020 and on any type of contract.

How will staff salaries be paid under the scheme?

Employers will be required to pay staff salaries under the scheme. The Government will reimburse costs, subject to the limits above.

Are employers obliged to make up the shortfall between the government contribution and usual salaries?

No, but employers may wish to do so to mitigate the risk of claims, for example claims for breach of contract (if a consultation procedure is not followed, or if agreement has not been reached through consultation).

How should employers select staff to furlough?

A fair and objective selection process should be designed to select staff for furlough or to remain at work and volunteers could also be invited.

Can staff on sick leave or self-isolating and unable to work from home be furloughed?

Staff on sick leave can be furloughed once their sick leave comes to an end. Staff who are self-isolating can be furloughed.

How does the furlough period interact with annual leave?

Annual leave continues to be accrued. The guidance issued to date does not prevent annual leave from being taken during furlough leave.

  • Michael Delaney is a partner at award-winning law firm VWV, which has offices in Clarendon Road, Watford