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Furlough Scheme: Updates

by Rob Stokes

Published on 4th April 2020

Additional updates and clarifications are being provided on the furlough scheme.

Here are the main points:-

  • CLARIFIED:  employees can start a new job when on furlough with their existing employer (meaning they might end up earning 80% of the old salary and 100% of a new one).  This was not explicitly prohibited in the earlier guidance, but the new guidance expressly allows it.  The guidance does say it has to be allowed under the existing employment contract, but presumably the furloughing employer can waive that.
  • CLARIFIED: a furloughing employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary.  This is good news for employees in roles such as car salesmen and estate agents.  But remember it can only be for commission from past sales as furloughed employees cannot be completing new sales when on furlough.
  • CHANGED: furloughing employers can reclaim 80% of fees (still to be defined) from HMRC.  The previous guidance said they could not.
  • CLARIFIED: the 80% does not include non-monetary benefits (eg the value of health insurance or a car).
  • CLARIFIED:  Company directors can be furloughed. They can still perform their statutory duties, but not other work for the company.
  • CONFIRMED: Employees can be furloughed multiple times, ie they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)
  • NEW: Employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep the record of that written notification for five years.

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