Understanding ‘Furloughed workers’

26th Mar 20

Furloughed workers – a new type of employee!  This term is not one which is regularly used in business and is understandably not being clearly understood by some business owners.

A business can currently ‘furlough’ an employee and keep them on the payroll, rather than laying them off. Any PAYE employer in the country small or large, charitable or non-profit, will be eligible for the scheme.

As an employer, if you cannot cover staff costs due to COVID-19, you may be able to access support to continue paying part of your wage, to avoid redundancies and retain your valuable employees.

If you intend to access the Coronavirus Job Retention Scheme, you will need to discuss with employees that they will become classified as a furloughed worker. This would mean that they are kept on your payroll, rather than being laid off.

To qualify for this scheme, you will not expect your furloughed employee to work for you during this stage.  This will allow you to claim a grant of up to 80% of your employee’s wage for all your employment costs, up to a cap of £2,500 per month.

Your employee will remain employed whilst furloughed.  You may choose to make up the remaining 20% of their salary during this time, but you do not have to.

Your employee may be eligible for support through the welfare system, including Universal Credit. 

It is intended that the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020 but will extend if necessary.

If you are concerned about the best steps you should take for your business, please do call us on 01440 821991 or contact us via our website