A Guide to Furlough Leave

To assist employers during the current Coronavirus pandemic the government has introduced furlough leave. This will allow employers to retain valued employees whereas they would otherwise need to be made redundant due to the current downturn in the economy. It is otherwise known as the Coronavirus job retention scheme. Furlough leave will help employers during the Coronavirus pandemic.

The goverment will provide a grant whereby employees may receive 80% of their pay for a three month period paying up to £2500 per month. Employees are therefore kept on the payroll. As it stands the money may not be available until June while the government sorts out the finer details. Employers may choose to top up furlough pay to an employee’s full salary or Universal Credit may be available.

An employee working at reduced hours and pay will not be entitled to furlough. Furlough pay can not be received if an employee is working.

During furlough leave, as with lay offs, annual leave accrues. A press release announced today states that twenty days leave may be carried over into a new annual leave year and employees may have up to two years to take it.

An employer must designate employees to be placed on furlough leave. The employees should be notified of this in writing and agree to that if there is not an appropriate clause in their employment contract. The employer then liaises with HMRC for reimbursement.