Coronavirus: Further guidance issued on furlough leave

Author: Douglas-Jones Mercer

Date: 07 April 2020

The Government has issued further guidance on furloughing employees and the assistance available through the Coronavirus Job Retention Scheme.

We already know that employers can furlough staff and reclaim 80% of the employee’s salary (up to a cap of £2,500 per month). The additional guidance confirms:

• Employees with more than one job can be furloughed from each, and the £2,500 cap applies to each job (so an employee with two jobs could receive up to £5,000 per month). This cannot be for linked or associated employers, and the employee needs to be readily available to return to work as soon as the furlough ends.

• A furloughed employee can go to work for another employer, this isn’t prohibited by the scheme. It may still be prohibited by the employment contract and the scheme does not override the contract.

• Company directors can be furloughed. They can still perform their statutory duties but must not perform any other work. If they are to be furloughed, this has to be formally approved by resolution of the board.

• Employees have to be notified in writing of their selection for furlough and this written record needs to be kept for 5 years. It is also advisable to get employees to sign such written record to confirm their agreement to being furloughed, and to accepting the reduced wage of 80% (or up to £2,500) if applicable.

• Compulsory commission can be included in the 80% but not discretionary commission, payments or bonuses, non-cash payments or benefits in kind.
• Employees can be furloughed multiple times subject to the minimum 3-week requirement. This means staff can be rotated on furlough.

If you need any further guidance or assistance on furloughing employees, or have any other employment queries related to coronavirus, you can contact Paul Shuttleworth on pas@djm.law.co.uk or Georgia Power on gpp@djm.law.co.uk. 

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