First, let’s recap on what Coronavirus Job Retention Scheme actually is…
If your employer plans to use the government Coronavirus Job Retention scheme, it means it intends to pay you while you’re not working, which is now otherwise known as being a ‘furloughed worker’. You can expect to be paid 80% of your normal pay, up to a maximum of £2,500 a month, a system which is currently due to end at the end of April 2021. According to the Citizen’s Advice Bureau, you can be furloughed if you’re on a temporary contract; on a zero-hours contract; an agency worker or are employed by more than one company – each one can use the scheme separately.
“Your employer should have sent you a letter or email explaining you’ll be paid through the scheme,” explains the CAB team. “If they haven’t sent you anything, ask for confirmation in writing. The government will only pay your employer if they have evidence you’ve been furloughed.”
And how do you work out your furloughed pay?
The government will give your employer 80% of your regular pay before tax – known as your ‘gross pay’ and you can’t get more than £2,500 a month, even if 80% of your gross pay is more than this. “Your employer works out how much you should get before they make a claim,” explains the CAB. “They can’t include tips, and they can only include commission and bonuses if your contract says you should always get them. If you’re furloughed part-time, you should get 100% of your normal gross pay for the days you work and at least 80% for the days you’re furloughed. Your employer might decide to pay you the extra 20% so you get 100% of your normal gross pay, but they don’t have to. Your employer will also take off tax, National Insurance contributions and any other deductions they normally make.”
What if that takes your salary below minimum wage?
The bad news is this isn’t illegal – mainly because you’re not really working. If you’re concerned about how the change might affect your standard of living you might find you’re entitled to some kind of benefits – which you can explore here.
Does the date of your furlough affect your pay rights?
In short, yes. If you were on the payroll on 19th March 2020 or furloughed before 1st November 2020, then your employer should claim for whichever is higher out of:
The amount you earned in the same month last year
Your average monthly earnings from the 2019-20 tax year
Alternatively, if you were furloughed for the first time after 1st November 2020, then your employer should claim for your average monthly earnings. They’ll use the amount you earned between the day before you were furloughed and:
6th April 2020 if you started your job before that date
The date you started your job if it was after 6th April 2020
What about if your employer isn’t paying up properly?
“It’s a good idea to talk to your employer first to see if you can sort the problem together,” advises the CAB. “If you’re not happy with what they say or you can’t contact them, you can tell your employer about the problem in a more formal way, which is called raising a grievance. You can also start a process called ‘early conciliation’ if the grievance doesn’t work. This is a way of resolving disputes with your employer through Acas, which is an independent organisation.”
Just bear in mind your employer should pay you on the same day you’re usually paid. If your employer says they haven’t had the money from HMRC yet, ask when they applied as it should only take around six working days for HMRC to hand over the money.
Does anything to do with furlough affect foreign workers’ rights to stay in the UK?
Put simply, no, it shouldn’t. “If you’ve been furloughed, it won’t affect your right to stay in the UK,” agrees the CAB. “For example, if your visa requires you to have a job, then being furloughed doesn’t mean you’ve lost your job. It asks you not to claim money from 'public funds', but the good news is furlough pay isn’t seen as public funds. And, if it requires you to earn a minimum amount, it doesn’t matter if your furlough pay is less than this.”
What happens if your employer tries to make you work on furlough?
If your employer furloughed you, then they shouldn’t ask you to work during any hours you’re furloughed – including any voluntary work. Just bear in mind they can legally ask you to do certain types of training to improve your skills in the meantime, but only as long as it doesn’t make money or provide services for them.
“Your employer could be committing a criminal offence if they ask you to work during any hours you’re furloughed,” argues the CAB. “You could complain to your employer – tell them it’s against the rules of the Coronavirus Job Retention Scheme. It’s a good idea to complain in writing, for example by text or email – as this means you’ll have evidence if you need it. If your employer still asks you to work, you could also report them to HM Revenue and Customs (HMRC). You don’t have to give your personal details when you report your employer. You can do so here – just choose the option to ‘Report tax fraud online’.”
Alternatively, if you’re worried about what could happen to you if you report your employer, you can get further advice from Protect, a charity that helps whistle-blowers, or the CAB.
Are you within your rights to accept another job during furlough?
While it’s not right that your current employer asks you to work during furlough, there’s actually nothing that precludes you from taking on work elsewhere, as long as your contract allows for it (i.e. it’s not competitive). “Getting a new job won’t affect your furlough pay,” says the CAB. “If you get a new job, you should make sure you can go back to work for the employer who furloughed you when they decide to bring you back and that your new employer gives you the HM Revenue and Customs (HMRC) starter checklist form to fill out.”
What happens if your employer doesn’t let you take paid holiday while on furlough?
Brace yourself – your employer doesn’t have to let you take paid holiday if they have a good reason, says the CAB. “For example, they might not be able to afford it, because the law says they have to pay you 100% of your pay when you take holiday. If you can’t take all your paid holiday because of coronavirus, you can carry over up to four weeks of holiday into the next year – you’ll have two years to use it.” It doesn’t matter what your job is, either – whether you’re a key worker or not, everyone can carry over their holiday and while you’re furloughed, you can still build up your paid holiday. It should be the case you can arrange with your employer when to take it, as you usually would.
Can your employer make other changes to your contract while you’re on furlough?
At the time you’re furloughed, you need to agree to the change in your contract with your employer, in writing or in person. But be warned – they might try to change something else in your contract at the same time such as statutory hours, holiday entitlement, your job remit or maternity or paternity rights. “If you’re not happy with the other changes, ask your employer if you can refuse them and still be furloughed,” advises the CAB. “You can check what to do if your employer tries to change something in your contract here.”
If your employer eventually decides to make you redundant, what are your rights?
Regardless of the situation we find ourselves in, your company must still follow a strict redundancy process for it to be legal, and it’s encouraging to know your statutory rights have not changed as a result of the coronavirus crisis. Among those is the right to a consultation with your employer, which involves speaking to them about why you’re being laid off and whether there’s anything else they could do first.
There was also a new law brought in recently to ensure all furloughed employees receive their full redundancy pay based on your normal salary, as opposed to the furloughed amount. Employees with more than two years’ continuous service who are made redundant are usually entitled to a statutory redundancy payment that is based on length of service, age and pay, up to a statutory maximum. You can read more about the new law here.
“Your employer will take you off the furlough scheme when you start your notice period,” adds the CAB. “They'll still have to pay you any money you're owed and follow the right process. They can’t discriminate against you.” Finally, remember to check whether you’re entitled to pay during your notice period; pay for holiday time you haven’t taken or any extra money for your redundancy.
If you refuse to be furloughed, can your employer make your redundant?
If you refuse to be furloughed, then yes, you could be made redundant, warns the CAB. “If your employer makes you redundant, they will still have to follow the usual rules to make the redundancy fair. And you might be able to claim benefits, but this will probably give you less money than 80% of your normal pay.”
Is there a way to recover money owed to you if your company goes bust?
According to the government website, it is possible to apply online for redundancy pay and other money you are owed. Just be aware you will need a case reference number (starting CN) to begin your claim, which you can get from the insolvency practitioner dealing with your employer’s insolvency.
Can an employer re-employ and furlough you after making you redundant?
In short, yes. As long as you were made redundant after 23rd September 2020, it is legal for companies to rehire you and immediately put you on furlough until your role becomes relevant to the organisation once more. “You can be furloughed full-time or part-time,” adds the CAB. “For example, you could work three days a week and be furloughed for the other two days. This is known as the flexible furlough scheme.”
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