Page last updated 6 October 2021

Background

On 20 March 2020, the Government announced the Coronavirus Job Retention Scheme (CJRS) to provide support for employers to enable them to continue paying part of their employees’ salaries rather than lay them off as a result of coronavirus. Workers who were placed within the scheme were put 'on furlough' and became 'furloughed' workers. The purpose of the scheme was to allow businesses to retain staff who would be needed in future to rebuild the business. The scheme provided a grant to employers to enable them to continue to pay some income to furloughed staff.

The scheme was initially intended to run for three months, backdated to 1 March 2020, so that it would close on 31 May 2020. Subsequently the Chancellor announced a number of extensions and the scheme ultimately ran until 30 September 2021. 

There were essentially three phases to the scheme:

• Mark 1 - 1 March 2020 to 30 June 2020 - the original scheme
• Mark 2 - 1 July 2020 to 31 October 2020 - the flexible furlough scheme
• Mark 3 - 1 November 2020 to 30 September 2021 - the extended furlough scheme

The rules and employee eligibility for each phase were slightly different, and the support that employers received for their furloughed employees varied. However, the support that employees received was set at 80% of their wages for their unworked hours (subject to a monthly cap of £2,500 for a fully-furloughed employee) throughout. 

Government guidance on the scheme was updated regularly. Earlier versions of the guidance can be found in the Government archives. 

The following guidance was written for employees who were affected by this measure at the time and reflects the position as we understood it while the scheme was active prior to 30 September 2021. It has been retained here for reference only. 

• I have been furloughed - what does this mean?
• Am I eligible for the scheme?
• What will I be paid for furloughed time?

• Will I still be entitled to parental leave while on furlough?

• I have been furloughed - can I do other work?
• I've been furloughed and my employer has asked me to work - what should I do?
• Can I see what my employer has claimed on my behalf?
• What happens when the scheme ends?
• Further guidance
• Guidance for employers

I have been furloughed – what does this mean?

As an employee, you should be notified by your current employer in writing that you are being furloughed because they are unable to operate or have less or no work for you to do. This means you will be kept on your employer’s payroll, on a reduced wage, rather than be laid off.

Under the terms of the mark 1 scheme your employer had to furlough you for a minimum of three continuous weeks. This meant that you should have stopped work completely for your employer for at least 21 consecutive days. After that, you could be brought back into work, kept on furlough, or even rotated on and off three week blocks of furlough depending on the work that your employer had available. You may have been furloughed more than once in this time. That was OK, as long as each period of furlough was a minimum of 21 days.

From 1 July 2020, the scheme rules were amended to permit employees to do some part time work for their employer. This is called flexible furlough. From this date you may have been furloughed either full time, part time or a mix of both. You should have received your usual pay for any hours worked, and furlough pay for the time on furlough.

Whether fully or flexibly furloughed, during your non-working furlough time you must not do any work for your employer or anyone connected with your employer. You can carry out training activities during your furloughed hours, provided that they do not generate revenue for, or provide services to, your employer.

Both you and your employer must agree to put you on furlough, or your trade union can reach a collective agreement with your employer. When deciding who to furlough, your employer must take any relevant employment, equality and discrimination laws into account.

If you are on a flexible furlough arrangement and your hours change then your employer must agree any new flexible furloughing arrangements in writing with you.

If, instead of being placed on furlough between 1 March 2020 and 30 June 2020, you were asked (and agreed) to work reduced hours, then you will not have been eligible for either the mark 1  or mark 2 versions of the scheme as you were continuing to work for your employer. You may though be eligible for the mark 3 version of the scheme. 

While you are on furlough you can continue to accrue holiday leave and take holiday leave. However, you should discuss with your employer in advance if you plan to take holiday leave as this will affect what they must pay you. Your employer can also ask you to take leave. 

If you do take holiday leave while on furlough, you should be paid your usual holiday pay, not the reduced furlough pay. For those on a variable rate of pay, this will be calculated on the average pay you received in the previous 52 weeks.

HMRC have noted that they will be keeping their policy on holiday pay under review during the furlough period.

It is the employer’s responsibility to claim through the scheme and pay what you are entitled to. If you have any concerns that you are not receiving what you are entitled to you should raise this with your employer in the first place. If you cannot resolve the issue you can seek support from ACAS.

Am I eligible for the scheme?

An employee on any type of contract, including full time, part time, zero-hours, temporary contract or fixed term contract can be furloughed. Agency workers, contractors within IR35 and directors and office holders can be furloughed.

You can also be furloughed by your employer if you are:

• on sick leave
• self-isolating because of COVID-19
• shielding in line with public health guidance (or shielding with a family member) and unable to work from home
• unable to work due to childcare responsibilities

For each version of the scheme, you must also have been on your employer's payroll by a specific date to qualify. Employees who cannot satisfy this requirement will not be eligible for support.

Mark 3 - Extended scheme from 1 November 2020

For the final version of the scheme, until 30 April 2021 you can be furloughed (in full or in part) provided that you were employed on 30 October 2020 and your employer has submitted a payroll report to HMRC between 20 March 2020 and 30 October 2020 which included a report of a payment of earnings to you. For claims from 1 May 2021, employees must have been on the employer’s payroll (i.e a payment of earnings must have been notified to HMRC) for the employee at some point between 20 March 2020 and 2 March 2021.

Even if you were not eligible for the mark 1 or mark 2 scheme, you may be eligible to be furloughed under the mark 3 scheme.

Mark 2 - Flexible scheme

From 1 July 2020, with a few exceptions for new parents and military reservists, only employees who had previously been furloughed between 1 March 2020 and 30 June 2020 for the minimum three-week period were allowed to be included in the scheme.

Mark 1 - Original scheme

To be eligible to be furloughed on the original mark 1 scheme, you must have been employed at 19 March 2020 and been on your employer's payroll on or before 19 March 2020. This means that your employer must have sent a report to HMRC including a payment of earnings to you in respect of the 2019-20 tax year on or before 19 March.

If you were employed as at 28 February 2020 (and a payment in respect of earnings had been made to you and reported to HMRC by that date) but then were made redundant, your employer could agree to re-employ you and place you on furlough instead. 

If you were made redundant on or after 19 March 2020, your employer could have still re-employed you as long as a wages payment to you had been made and reported to HMRC on or before 19 March 2020.

The deadline of 19 March is relevant as it was the day before the scheme was announced. HMRC needed to know that employees who were furloughed were genuine employees included on a payroll before the scheme announcement to make sure that the scheme was not abused. However, this requirement for a hard cut off did mean that some people who were genuinely in employment by 19 March, but who changed jobs around this time, were not eligible to be furloughed.

For example, an employee who joined on the 22 February 2020 but who was not included on their employer's February payroll on 25 February 2020 because there was insufficient time for the payroll department to process the new starter, and who then did not receive their first payment until the March payroll on 25 March, would have missed out as no payroll submission would have been made in time.

What will I be paid for furloughed time?

Throughout the time you are furloughed and not working you will be entitled to 80% of your normal wages, subject to a cap of £2,500 per month. This cap is reduced if you are not fully furloughed for the whole month. There are special rules which your employer must follow to determine your usual pay, which will depend on how long you have been working for them, and whether you are on fixed or variable hours. You will continue to pay income tax and National Insurance on any wages paid to you by your employer while you are on furlough. You will also continue to pay any pension contributions and student loan repayments that are deducted from your wages.

Your employer is not required to top up the remaining 20% of your pay, although they may choose to do so.

From 1 July 2021, furloughed workers were permitted to return to work on a part-time basis while remaining within the scheme. Your employer was required to pay for any hours that you actually work at your normal rate of pay, while the furlough scheme can be used to provide a top up of your wages for hours which you would normally have worked but are not able to. For flexibly furloughed workers the usual cap of £2,500 is scaled back so that it is proportionate to the amount of hours not worked. 

Discretionary bonuses, commissions, tips and fees will not be included as part of the calculation of your income. Piece-rate payments, and non-discretionary bonuses, fees or overtime can be included.

If you are asked to carry out training while on furlough, the payment you receive should be enough to ensure that you have received the NLW/NMW for the time you spent training.

If your salary is reduced, then you may be eligible for support through the welfare system.

Will I still be entitled to parental leave while on furlough?

HMRC guidance says that the normal rules for parental leave including:

• maternity pay
• adoption pay
• paternity pay
• shared parental pay
• parental bereavement pay

will apply while an employee is on furlough. However, the timing of when you were placed on furlough might affect how much you are paid because the amount payable can depend on earnings in previous weeks.

Regulations were introduced by the Government with the object of ensuring that individuals on furlough, who started parental leave on or after 25 April 2020, should not have the amount of the statutory payments received affected because they are on furlough. Furloughed individuals who started a period of parental leave prior to 25 April 2020, and whose employer was not topping their pay up to 100% of their usual wage, may have their entitlements affected because they are on furlough. This is because the period on which the statutory payments are based will include periods where they were only receiving 80% of their usual income.

If you are claiming Maternity Allowance (either because you are employed and do not qualify for Statutory Maternity Pay or are self-employed and have paid sufficient Class 2 National Insurance) you cannot claim both Maternity Allowance and furlough pay. If you have agreed to be put on furlough, you must contact Jobcentre Plus to stop your Maternity Allowance payments.

I’ve been furloughed – can I do other work?

Furloughed employees are specifically allowed to take work with another employer during their furloughed time as the Government do not wish to restrict the availability of labour during this period. What you must not do is any work that makes money for the employer (or anyone connected with them) who has put you on furlough during your furlough time. Your furlough time might be a few hours per day or whole days or weeks, depending on your work pattern. Whatever the position, you cannot do work for your employer in any period of time that they are recording you as on furlough.

If you have more than one employer you can be furloughed by one and work for the other(s), or be furloughed by all your employers.

If you take on a new employment with another employer you will be asked to complete a new starter checklist and should complete Statement C on the checklist. 

HMRC has confirmed that employees can carry out union or non-union representative duties for the purpose of individual or collective representation of employees or other workers, provided that the work done does not result in the provision of services to, or generation of revenue for, their employer or anyone associated with their employer.

I’ve been furloughed and my employer has asked me to work during my furloughed time – what should I do?

The purpose of the scheme is to protect jobs for workers who cannot continue to work for their employer because of the COVID-19 situation. In order to ensure that the system is not abused, HMRC are asking workers to report abuse by their employer. Fraudulent claims under the scheme will take money from the NHS and limit the ability of the Government to provide support to those who need it.

It was made very clear by Government and HMRC that until 30 June 2020, any employees who were furloughed must not undertake any work for their employer. From 1 July more flexibility was introduced and employees are now permitted to do some work for their employer - for which they must be paid their usual wages - whilst still receiving support from the furlough scheme for the hours not worked.

In the meantime, employees who have been furloughed and still have access to work emails, texts or phone calls must ensure they do not answer these during their furloughed hours and take steps such as including an out-of-office message on emails and phones. 

Even if your employer has not asked you to work, continuing to do so regardless during furlough time could be putting your employer at risk as they may be accused of abusing the scheme at a later date.

Employees must not do any work for their employer even if their employer is paying the additional 20% of their salary. However, employees can undertake training, voluntary work or, as noted above, work for another employer unconnected to their furloughing employer.

Can I see what my employer has claimed on my behalf?

From February 2021, you will be able to check if your employer has made a CJRS claim on your behalf through your online Personal Tax Account. HMRC are advising that employees should talk to their employer in the first instance if they have any questions.

At the same time HMRC will publish the names of employers who have made CJRS claims from 1 December 2020 onwards, together with an indication of the value of the claims in periods from that date. Information on claims made prior to 30 November 2020 is not being published.

What happens when the scheme ends?

The scheme is scheduled to close on 30 September 2021.

When the scheme ends, employees should be aware that employers will need to decide whether they have enough work for their furloughed workers, or if they will need to consider termination at that point. Employees can also be made redundant during the furlough period. 

Further guidance

If you need further support or guidance, employees are asked to contact their employer first. HMRC provides the following support routes in addition to their written guidance:

• A digital assistant
• Videos and free webinars  

An HMRC helpline is available if you cannot get the support you need from your employer or online but please be aware that HMRC are very busy and they are asking people to seek guidance online first.

Guidance for employers

The ATT has written guidance on the scheme from the employer perspective for the mark 1 and mark 2 versions of the scheme, and a separate article for mark 3, extended version of the scheme.