On 4 April 2020 the government announced yet further guidance, clarifying points that many employers were asking since the introduction of the Coronavirus Job Retention Scheme a couple of weeks ago.
Please see the update to the Coronavirus Job Retention Scheme, but below we set out the main points clarified.
Can employees on furlough, start a new job?
Yes, they can! This is so long as it is allowed, under the contract of employment of the job from which they are being furloughed from or indeed if that employer gives them consent to do so. In theory a furloughed employee could get 80% of their existing salary and 100% of their new salary at the same time. Therefore if employers have staff that are continuing to work and with some that are on the scheme, careful consideration will have to be given as to whether to allow furloughed staff to take additional jobs, given that those on the scheme could be potentially better off than those who have to continue work for that employer, possibly on reduced pay.
Can employees hired for the first time after 28 February 2020 be furloughed?
No they cannot as they were not on the payroll as at 28 February 2020.
Can employees who were dismissed or who changed jobs after 28 February 2020 be rehired and put on furlough?
They can be eligible if the old employer chooses to re-engage them and then furlough them. This means individuals who changed jobs after 28 February 2020 may approach their old employer and ask to be re-engaged and furloughed. However, there is no obligation on the old employer to do so. Re-engagement in such circumstances is not risk-free for an old employer as continuous service will be preserved (which may alter redundancy entitlements and unfair dismissal protection), and there are some cost implications, because annual leave will continue to accrue. Specific advice should therefore be sought.
Can we rotate employees on furlough?
Yes, so long as each period of furlough is at least 3 weeks. So in theory, you could have an employee on furlough, back to work and furlough again.
Are there any requirements about furlough status notification?
This latest guidance has made it clear that employees on furlough must be notified by their employer in writing and a record of that notification must be kept for 5 years.
Does the 80% include non-monetary benefits?
No non-monetary benefits such as the value of car or health insurance are not included.
What about commission?
The guidance now makes reference to the fact that an employer can reclaim 80% of compulsory commission as well as basic salary. (Compulsory commission we understand to mean contractual!) It must also therefore mean by implication in respect of past commission (as the employee cannot not earn commission whist on furlough as they cannot do any work).
What about Company Directors?
The guidance has confirmed that they can be furloughed, if they are on the payroll. They obviously cannot work for the employer, but they can continue to perform their statutory duties.
We appreciate that the guidance on this scheme has come out in a drip feed format from the government, as and when they can clarify we will update you. In the meantime if you have any questions please contact Ami Naru.
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