Under the Coronavirus Job Retention Scheme, employers are allowed to put staff who can’t work on ‘furlough’ – which effectively means their job is put on hold – and the state will pay 80% of their salary, up to £2,500/mth. The scheme’s intended to help those who would otherwise be made redudant, or are unable to work for another reason such as self-isolation or because they have to be home with their kids. But it can also help those who moved to a new job just before the crisis hit.
If you were an employee on a firm’s payroll on 28 February, and left after this to start a new job which fell through due to coronavirus – for example, you didn’t start the new job, or you started and they’re making you redundant – then your old employer CAN rehire you to furlough you, though it remains the old employer’s choice whether it’s willing to do this.
While it had already been indicated that this was the case, and that the furlough scheme was available to those who had been made redundant or would have been, we’ve now had it confirmed by the Treasury and HM Revenue & Customs that old employers can do this.
However, not everyone will be able to benefit. It’s key here that the issue was caused by coronavirus. For example, if you left your previous job to take a few months off, then you won’t be eligible to be rehired as your unemployment wasn’t related to coronavirus.
What has the Government said?
A Government spokesperson told us: “The Coronavirus Job Retention Scheme is aimed at those who would otherwise be unemployed as a result of coronavirus. It allows for those who were on the payroll of a company on 28 February but subsequently left to be put back on payroll and furloughed.
“This includes those who have resigned to start a new job after 28 February. They may return to their old employer but decisions around whether to offer to furlough someone are down to the individual company.”
The Government has also said on the back of this it will update the official guidance on the Job Retention Scheme as soon as possible.
What does ‘furloughing’ mean?
It’s a scheme announced by the Government which aims to help employees whose job has been threatened by coronavirus. The idea is that rather than your company making you redundant because there’s no work for you to do, it ‘furloughs’ you – think of it like your job being put on standby. The idea is you go into sleeper mode during the crisis, and then when it’s over, your employer can instantly restart things and get the economy running again. Here’s how it works:
- The state will pay 80% of your salary, up to £2,500/month. The state will cover an employee’s salary by means of a grant to the employer.
- Your employer can choose to ‘top up’ the state grant. It can pay your full salary while you’re furloughed – but it’s not obliged to do this. And indeed, many won’t have the funds to be able to do this.
- It’s up to your employer to decide and define who is furloughed. It could be because you’ve no work to do, but it could also be because you have to be home to look after children or you’re self-isolating. The key to this is the state is looking to support people, so this isn’t about loopholes to catch people out, it’s about a broad sweep to gather people in.
- Money will come “before the end of April”. It will be issued to employers through grants. Wages paid will be paid backdated to 1 March.
- You’ll still need to pay tax and national insurance contributions on this wage. And while you’re on furlough, you’ll still have the same rights as you did when you were employed – including any entitlement to statutory sick pay or maternity pay, as well as redundancy payments.
- Check whether you can work elsewhere while on furlough. There’s nothing in the furlough rules which stops you from taking a job elsewhere if you’re placed on furlough by an employer (doing so wouldn’t affect your furlough pay either). But your employment contract may not allow it, so check.
How do I get rehired?
If you’ve been laid off or had a job fallen through, and you were on your old employer’s payroll on 28 February and want to be rehired, then:
- Get in touch with your old employer.
- Explain the furlough process to them.
- Show your employer HMRC’s guidance on the furlough scheme.
- Watch Martin’s video on the furlough process.
It’s worth noting it’s up to your old employer whether it does this or not – there’s no legislation forcing it to.