Coronavirus: your questions answered

06 April 2020

How the Government's radical Coronavirus Job Retention Scheme affects you and your employees

What is the Government’s Coronavirus Job Retention Scheme and when does it come into effect?

The Government has announced a radical job retention scheme that will cover 80% of the wage costs of employees who are ‘furloughed’ by their employer – up to a maximum of £2,500 per month. We now have some detailed guidance of how the system to reclaim money will work, but it;s not yet up and running. The Government plans to have it in place in time for the April payroll (although we think that is optimistic), and it will be backdated to cover the period from 1 March 2020. So there's no reason for an employer not to furlough workers now, if necessary.

What does furlough mean and how is it different from being laid off?

Furlough means ‘temporary leave of absence’ and it is not a term that has been used in UK employment law – until now. It seems that an employer will be asked to designate an employee as being ‘furloughed’ meaning that they are being kept on the payroll, but not being given any work to do. This is in reality no different from a ‘lay-off’ but the Government seems keen not to refer to it in that way. This may be because the term ‘lay-off’ is sometimes used (inaccurately) as though it is interchangeable with ‘redundancy’ – even though they have distinct and separate meanings in employment legislation.

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