LOCKDOWN has seen millions of workers take a 20 per cent pay cut on their wages which are being supplemented under emergency furlough measures as we stay home to fight coronavirus.
The scheme announced by Chancellor Rishi Sunak in March went live today (April 20) – but what exactly does the word "furloughed" mean?
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What are furloughed workers?
Furloughed workers are those who are unable to work due to the coronavirus pandemic because their places of work have been forced to close or cut back on staff.
They are not people who have been made redundant.
Their employers are now able to access support to continue paying part of their staff's wages, to avoid redundancies.
Mr Sunak has promised to pay 80 per cent with a maximum of up to £2,500 per month in salaries to those who are unable to work as part of the Coronavirus Job Retention Scheme.
What is furloughed leave?
Employers who wish to access the job retention scheme, which has been extended to include those employed since March 19, should speak with their employees about classifying them as a furloughed worker.
This would mean that employees are kept on the payroll, rather than being laid off.
According to the Government, furloughed staff should not undertake any work for their employer during the scheme.
This allows employers to claim up to 80 per cent of wages – with a limit of £2,500 per month.
The Department for Business, Energy and Industrial Strategy said: “To qualify for this scheme, you should not undertake work for them while you are furloughed.
“This will allow your employer to claim a grant of up to 80 per cent of your wage for all employment costs, up to a cap of £2,500 per month.
“You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
“If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit."
Who can be furloughed and how do I claim my pay from the Government?
Any UK employer can apply for the furlough scheme, including business, charities, recruitment agencies and public authorities.
Employers have varied as easyJet, Disney and Premier League clubs like Newcastle have already furloughed some of their workers.
The government has also asked if employers can pay the extra 20 per cent so staff don't miss out on wages.
But it is up to employers whether they pay salaries on time or wait for the furlough scheme to pay out.
The scheme is set to pay out by the end of the month, with employers able to apply from April 20.
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To be eligible for the scheme must have created and started a PAYE payroll scheme on or before March 19, 2020, have enrolled for PAYE online, and have a UK bank account.
To access the scheme, your employer must comply with the following:
- Designate employees who cannot do their jobs due to the coronavirus measures put in place by the Government
- Notify those employees of their new "furloughed" status
- Submit information to HMRC about furloughed employees to set up a system for reimbursement and existing systems that will facilitate payments.
Find out more on how to get your application in from 8am Monday, April 20, here.
Can I take another job while on furlough?
Technically yes, so long as you are not breaking your original contract and you aren't breaching lockdown protocol.
Some contracts do stipulate that you cannot work for rival employers or need to get permission before earning income elsewhere.
You can ask your HR team if you're unclear or want to check your terms of employment.
It is strongly recommended that you speak with your boss before taking on another job as you are still their employee.
Do I pay tax on furlough?
You will continue to be paid by your employer as long as you are furloughed.
You will receive at least 80 per cent of your normal wage, and will still pay taxes from your income.
Your employer will then deduct Income Tax, National Insurance contributions and any other deductions that they would normally make.
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