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As the Covid-19 outbreak started to impact businesses across the country, employers have had to react to managing their workforces. To help businesses through this process, we have brought together the most frequently asked questions regarding the furlough of staff.

What is furlough?

Furlough aims to support employers and protect as many jobs as possible during the current coronavirus outbreak. The employer can apply to the government for a grant to pay part of an employee’s salary (and some related payments) if the employer is unable to maintain their workforce because of the effects of the coronavirus and has no work for the employee to do.

What is the Coronavirus Job Retention Scheme?

The Coronavirus Job Retention Scheme (CJRS) is the name given to the scheme under which employers furlough their staff. The scheme is for those employers that cannot maintain their current workforce because their operations have been severely affected by coronavirus.

Which employers can use the CJRS?

Any entity with a UK payroll can apply for payments under the CJRS, including businesses, charities, recruitment agencies and public authorities (although the government expects that the scheme will not be used by many public sector organisations). Specifically, in order to be eligible an employer must have: (a) created and started a PAYE payroll scheme on or before 19 March 2020; (b) enrolled for PAYE online (c) a UK bank account.

Which type of employees can be furloughed?

Employees on any type of employment contract can be furloughed, including those on full-time, part-time, fixed-term, agency, flexible or zero-hour contracts. As well as employees, the CJRS applies to a much wider group of people (provided they are paid via PAYE) including office holders (which for most entities will be company directors), salaried members of Limited Liability Partnerships (LLPs), agency workers (including those employed by umbrella companies), and workers. It includes foreign nationals on all categories of visa who are employed one of these type contracts and paid through PAYE.

Can we furlough any of these types of workers?

In order to be furloughed, employees must be either: (a) employed by the employer on 19 March 2020 and on the employer’s PAYE payroll on or before 19 March 2020 (which means the employer must have made an RTI submission notifying payment in respect of that employee to HMRC on or before 19 March 2020); or (b) employed by the employer on 28 March 2020 and on the employer’s PAYE payroll as at 28 February 2020 (which means the employer must have made an RTI submission notifying payment in respect of that employee to HMRC on or before 28 February 2020) but were made redundant or stopped working for the employer (for any reason) on or after 28 February 2020 so not employed on 19 March 2020, in which case employer can re-employ the employee, put them on furlough and claim for their wages from the date on which the employer furloughs them even if re-employed after 19 March 2020.

Are there any conditions that apply to furlough?

The employer and the employee must reach an agreement that the employee is to be furloughed. There should be a written record of this agreement, which must be kept by the employer, but the employee does not have to give their written confirmation that an agreement was reached. In addition, the employee must not do any work for, or on behalf, of the employer or any linked or associated organisation (includes providing services or generating revenue) while on furlough. This includes not providing any services or generating revenue for the employer. The employer includes any organisation linked or associated with the employer.

Does an employee have to agree to be furloughed?

Yes, the government guidance requires that the employee agrees to being furloughed. In addition, ideally employers should get the employee to agree to being furloughed, to not doing any work for the employer and to the reduction in their pay. 

If employees do not agree to be furloughed can an employer terminate their employment?

Yes, if employees do not agree to be furloughed, employers can terminate the employee’s employment (subject to the terms of any relevant employment legislation). The reason for termination is likely to be by reason of redundancy. If the legal definition of redundancy is met, a proper process should be followed, particularly if the employee has unfair dismissal and/or discrimination protection.

Can employers re-employ staff who were made redundant before 19 March 2020?

Yes, if that member of staff was employed by the employer on 28 March 2020 and on the employer’s PAYE payroll as at 28 February 2020. 

Does the employer have to re-employ employees who have been dismissed or who left its employment since 28 February 2020?

No, it is the employer’s decision whether to furlough staff or to re-employ staff who have left. However, if an employer is in the process of making redundancies, there is a risk of unfair dismissal claims (normally only for those with more than two years’ service) if furloughing is not considered along with other considerations on how to avoid redundancies. Employers who decide they have no alternative but to make redundancies now, rather than furlough staff, should consult fully and keep records setting out why they made redundancies.

What period can furlough claims start from?

Claims under the CJRS can be backdated to 1 March 2020 provided the employee had stopped working at that time. If the employee was still working at this time, the claim is from the time the employee stopped working for the employer. 

When does the CJRS end?

At the moment it is due to end on 30 June 2020, but the government has said that it will be extended as required. 

How long can we claim under the CJRS for furloughed staff?

Employers can continue to claim under the CJRS for furloughed staff until the end of the scheme or until the employee returns to work, if that is earlier. 

What happens at the end of the CJRS?

When the government ends the job retention scheme at the end of June 2020 (unless extended), employers will have to decide whether they have enough work for employees to return to work. If the work has ceased or diminished, or is expected to cease or diminish, the employer may have to make redundancies (in line with its obligations under employment law).

Can we make redundancies before the end of the CJRS?

Yes, employers can end an employee’s employment while they are on furlough, including because of redundancy. However, it is important to remember to comply with obligations under employment law when making those redundancies, which is likely to include having to consult with those employees affected. Employers can consult with union and non-union representatives who are furloughed provided those representatives do not provide services to or generate revenue for, or on behalf of the employer or a linked or associated organisation. 

Do the usual employment law obligations when making redundancies?

Yes, which means that employers will have obligations to consult collectively with the trade union or employee representatives where it proposes to make 20 or more redundancies at one establishment in 90 days or less. It will also have to follow a proper process for each individual employee who it is proposed to make redundant (regardless of whether collective consultation obligations apply).

What if employees have some work but not enough?

If employees have some work but not enough to keep them busy for all of their working hours, they cannot be furloughed. Employees are not allowed to carry out any work for the employer while furloughed. If an employer wants to claim for some staff under the CJRS where there is not enough work to keep all staff busy, it will have to consider furloughing some staff and giving the duties of the furloughed staff to other employees. 

Is there a minimum furlough period?

Yes, an employee must be furloughed for a minimum period of three weeks. If an employee is furloughed for less than this period, the employer cannot make a claim for payment under the CJRS for the employee or if they have already made a claim, the employer will have to repay HMRC any money it has received. Subject to this and any agreement with the employee, employees can be asked to return to work at any time or their employment terminated (subject to any notice period and any protection from under employment legislation).

Can we change the staff on furlough?

Yes, employers can rotate the staff it has on furlough by having some employees on furlough and others working. Then after a minimum of three weeks, those who are working can be put on furlough and the other group would start working again.

What if an employee has a second job?

Employees with two or more jobs are eligible for the scheme for one or both of their jobs - each job is treated separately. 

Can an employee work for someone else while they are furloughed?

Yes, employees can be furloughed from one job and receive their furlough payment and then start working for another employer during the hours they would normally work for the employer who has furloughed them (subject to the terms of the contract with the first employer). They will receive the furlough payments from the first employer and their normal wages from the new employer. If an employee wants to work elsewhere and this is not allowed under their contract, they should speak to their employer and discuss the nature of the work and the business they will be working for. Whether the employer gives permission for the employee to work elsewhere is likely to depend on the competitive nature of that business. 

Can employers place employees who are shielding on furlough even if there is work for them to do?

Yes, employers can put employees who are shielding in line with public health guidance on furlough even if there is work for them to do. This is also the case with employees who need to stay at home with someone else who is shielding. Shielding employees are those who are extremely vulnerable and who have been notified by the NHS to isolate for 12 weeks. If shielding employees can work at home, then they can continue to do this unless they become unwell. However, if the shielding employee cannot work from home, they can be furloughed.

How much is paid out under the CJRS?

Employers can claim for: (a) 80% of an employee's gross wages, subject to a maximum of £2,500 per month; (b) employer national insurance contributions on the 80% of gross wages (or £2,500 maximum monthly payment); and (c) minimum employer pension contributions on the 80% of gross wages (or £2,500 maximum monthly payment).

What makes up an employee’s gross wages?

An employee’s gross wages includes regular wages, non-discretionary overtime, non-discretionary fees, non-discretionary commission payments and piece-rate payments. It does not include payments made at the discretion of the employer or a client - where the employer or client was under no contractual obligation to pay, including any tips (including those distributed through troncs), discretionary bonuses, discretionary commission payments, non-cash payments and non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay.

What period does an employee use to calculate an employee’s gross wages?

For employees on a fixed rate, employers use the employee’s gross wages for the latest salary period ending on or before 19 March 2020. For those employees on variable pay, employers use the higher of: (a) the average gross wages for the 2019-2020 tax year or if not employed for the whole of the 2019-2020 tax year, the period of employment before furlough, and (b) the actual amount paid to the employee in the corresponding calendar period in the previous tax year. 

Is their guidance on the amount that can be claimed?

Yes, this is available at This will also take you to the link to make a claim. 

How often can employers apply for payment under the CJRS?

Employers can choose their claim period but can only make one application for all employees who are furloughed in that claim period.

How are claims made for payments under the CJRS?

Employers must use an online portal to make claims through the government gateway. The link can be found on this web page

How long before money is received under the CJRS? 

Employers should allow at least six working days from any claim for the money to clear into their bank account.

Can employers top up an employee’s pay to 100% of salary?

Yes, employers can top up an employee’s pay to 100% of salary or to any amount. 

Do employees pay income tax and employee national insurance contributions on any payments received

Yes, these deductions are made as normal.

Do employers have to repay the money they receive under the CJRS?

No, unless the employer becomes unwilling or unable to use the payment for the purpose of CJRS. This may be because the employer has to take an employee off furlough before they have been furloughed for 3 weeks.

Can employers use the money received for employees on furlough for something else?

No, employers must use the money received from the government to pay their employees or their pension contributions (or the employer's national insurance contributions on the salary payment). HMRC, which operates the furlough scheme, can check records and other information on the furlough scheme after it stops operating for fraudulent or other claims.   

Do employees continue to accrue holiday while on furlough?

Yes, holidays continue to accrue while an employee is on furlough. More generally, an employee retains their right to employment law protection while on furlough. 

Can employees take holiday while on furlough?

Employees can ask to take holiday and employers can require employees to take holiday (subject to minimum notice of their requirement) - holiday does not appear to end the furlough period. However, if an employee takes holiday while on furlough, they are entitled to be paid at 100% of salary, so employers must top up to full salary from 80% gross wage payment or £2,500.

What happens to an employee’s probationary periods while they are furloughed?

Unless it is agreed with the employee, their probationary period will continue to run while the employee is on furlough. Employers may want to consider agreeing that the probationary period is suspended while an employee is furloughed and re-starts when the employee returns to work. Can fixed-term contracts be extended while an employee is furloughed? Yes, if the employee’s fixed-term contract has not already expired, it can be extended or renewed while the employee is furloughed. 

Can an employer furlough an employee who is on sick leave instead of paying Statutory Sick Pay (SSP)?

Employees who are on sick leave or self-isolating should normally get SSP. If an employee is on sick leave due to coronavirus, they should be on SSP. The illness should not be a trigger in deciding whether to furlough an employee. Employers can place employees on furlough leave after their SSP period if appropriate. An employer cannot claim SSP and a payment under the CJRS for the same employee at the same time. The CJRS is not intended as an alternative for sickness absence - the illness may be short term and furlough periods are a minimum 3 weeks. 

What happens if an employee is already on sick leave when the employer furloughs staff?

If employees are off sick when other staff are furloughed, the employer can end the employee’s sick leave and furlough the sick employees with other staff. In these cases, the employee will receive furlough pay instead of SSP.

What happens if an employee is sick while they are furloughed?

If a furloughed employee becomes ill, they must be paid at least SSP. It is up to employers to decide whether to move furloughed employees who are sick onto SSP or to keep them on furlough, at their furloughed rate (and continue to claim relief under the CJRS). If an employee is moved onto SSP, the employer must stop any claim under the CJRS for that employee. 

Can employers recover SSP from the government?

Employers are required to pay SSP themselves, but (subject to having less than 250 employees on 28 February 2020) an employer can recover up to 2 weeks SSP starting from the first day of sickness, if an employee is unable to work because they either have coronavirus, or cannot work because they are self-isolating at home, or are shielding in line with public health guidance. If employers keep the sick furloughed employee on the furloughed rate, they remain eligible to claim for these costs through the furloughed scheme.

What happens to maternity and other family-friendly leave and pay during furlough?

Employees can be furloughed and on maternity leave (or other family-friendly types of leave) at the same time. Employers can claim through the CJRS for enhanced (earnings related) contractual pay for employees who qualify for maternity pay, adoption pay, paternity pay and shared parental pay. Recovery by employers of statutory maternity pay, adoption pay, paternity pay, and shared parental pay is subject to the usual rules and is recovered in the normal way. Entitlement to family-related pay is calculated usually based on an employee's average earnings over an 8-week period prior to the 15th week before the baby is due or a child is placed for adoption. Legislation has been introduced so that for those employees whose period of family-related pay begins on or after 25 April will be assessed on their usual, full pay, rather than what they are receiving while furloughed.   

Nothing in this article constitutes legal advice on which you should rely.

The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article.

Our Platform Terms of Use apply to this article. All information is correct as of 1 May 2020. Keep up to date with the latest UK government guidance for businesses and employees at If you require any legal advice, please visit LawBite is an on-line platform that seamlessly connects businesses to expert legal help that is clearer and more affordable, usually 50% lower than from comparable services. We offer a 15-minute free consultation for business legal advice. LawBite continues to issue advice on the impact of Covid-19 on businesses. The author of this blog post is Louise Paull. Louise Paull is an experienced employment lawyer providing clients with commercial, practical advice on a full range of employment and contractor-related matters from the start of the relationship, through to its end and everything in between.

In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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