The Government Job Retention Scheme is available to all employers with a UK bank account who were operating PAYE on 19th March 2020. It is initially intended to run for four months starting from 1st March.
The Scheme enables employers to furlough employees, including supply teachers working for employment businesses or umbrella companies, for a minimum period of three consecutive weeks. The employer receives a grant to cover 80% of an employee’s usual wage, or £2,500, whichever is lower, provided the employee was employed on 19th March and on the PAYE payroll on or before the 19th March 2020.
For employees whose pay varies, such as supply teachers, there are a number of different ways in which the pay can be calculated:
- If employed for 12 months, then it would be the higher of either:
- the same month’s earnings from the previous year; or
- the average monthly earnings from the 2019/20 tax year.
- If employed for less than 12 months, then they would claim the average of monthly earnings since they started working.
- If they only started working in March 2020, then they would use a pro rata basis for earnings so far.
Both the employer and the employee must agree to the furlough. The employer has to notify the employee in writing and this should be retained by the employer for five years. If the employer reaches a collective agreement with a trade union, such as the NASUWT, that is also acceptable for the purpose of the scheme.
Collective consultation may be required depending on the numbers involved.
It is important to note that any income received under the Job Retention Scheme is still subject to all statutory deductions, such as tax and National Insurance Contributions (NICs), as well as any pension deductions as appropriate.
Under the Job Retention Scheme, there is nothing that prevents your employer from topping up the salary you receive to 100% of your normal pay.
The Government has also confirmed that the entire grant must be paid to the employee - no part of the Job Retention Scheme can be held back by the employer, e.g. deductions for fees, administration of the Scheme.
The Government will only fund the minimum mandatory employment contributions for pensions for those employees who are furloughed.
While furloughed by the employer, an employee is not able to undertake any work for that employer or any organisations linked to that employer.
However, there is nothing to prohibit an employee undertaking work for another employer while furloughed with their current employer(s).
The Job Retention Scheme applies to each employer individually, so an employee could be in receipt of 100% of their wages from one employer, whilst in receipt of 80% of their wage from the employer that has furloughed them.
This is supported by advice from both HMRC and Acas which makes it clear that each job contract is treated separately.
Employees are advised to check their contract carefully to see how they are employed and whether there are any restrictions on who they are able to work for, although the employer may be content to waive any such restrictions.
For supply teachers working through an agency, whilst furloughed by an agency, a supply teacher is not able to undertake any work for that employer/agency, including undertaking or continuing other assignments at different schools that are the clients of the agency.
However, a number of supply teachers are signed up and work for a number of different supply agencies.
As these are each separate agencies/employer with separate PAYE reference numbers, there is nothing to stop a supply teacher working for one agency/employer whilst furloughed with another or a supply teacher may be furloughed from each of the agencies they are signed up with.
The Job Retention Scheme applies to each employer/agency individually, so a supply teacher could be in receipt of 100% of their wages by continuing to work through one agency, whilst in receipt of 80% of their wage from an agency that has furloughed them.
If an employee started unpaid leave after 28th February 2020, you can put them on furlough instead. If you put them on furlough, then you should pay them at least 80% of their regular wages, up to the monthly cap of £2,500.
If an employee is on unpaid leave on or before 28th February, they cannot be furloughed until the date they agree to return from their unpaid leave.
If an employee is self-isolating or shielding in line with the advice from public health authorities in the UK, including staying at home with someone who is shielding, they may be eligible to be furloughed, provided they cannot work from home once they have declared themselves fit to return to work.
If an employee is signed off sick and in receipt of statutory sick pay (SSP), the employer can put the employee on furlough, provided that they are no longer in receipt of SSP.
If an employee is furloughed and becomes sick, there is nothing to stop the employer paying them at the furloughed rate provided this is at least the equivalent of SSP.
If an employee undertakes training whilst furloughed, they must be paid at least the national minimum wage/national living wage (NMW/NLW), even if this would equate to more than 80% of their wage.
Those on maternity leave, adoption leave, paternity pay or shared parental leave (SPL) are still eligible for statutory entitlements at 90% in the first six weeks and then 90% or statutory maternity pay (SMP), whichever is lower.
Enhanced schemes (i.e. the Burgundy Book) would be included in the wages that can be claimed.
As employees are still employed during the period of furlough, statutory holiday will accrue.
Employees are able to take holiday whilst they are furloughed and this should be paid at their normal rate of pay or, where pay varies, calculated on the average pay received in the previous 52 weeks.
Employers are therefore obliged to pay any additional amounts in excess of the grant received under the Job Retention Scheme, although the employer has the flexibility to restrict when leave can be taken.
For employees who do not usually work bank holidays, the expectation is that the employer either tops up the pay to the usual level received or they give a day of holiday in lieu.
The statutory minimum holiday leave entitlement of 5.6 weeks per year will accrue, but the precise amount of holiday left will depend upon how much holiday an employee has already taken.
If an employee has been unable to take all their statutory annual leave entitlement by the end of 2020 due to COVID-19, the Government has introduced a new legal right which enables them to carry over up to four weeks (28 days) of unused leave into the next two leave years if it is ‘not reasonably practicable’ to take some, or all, of the holiday due to COVID-19.
The remaining 1.6 weeks of holiday can be carried forward by one year by agreement.
Employees can return to their duties or have their contracts terminated. They would still be entitled to rights in respect of SSP, maternity, unfair dismissal and redundancy.
Please also refer to our Coronavirus FAQs for more detailed examples.