As hauliers start to furlough employees, we look at what that means for you.
Until recently, few people had heard of ‘furlough’, yet the impact of coronavirus on business and the economy means that in the coming months millions of workers will be relying on it to be paid. The scheme will be run by HM Revenue and Customs.
In short, furlough means ‘grant leave of absence’, and both you and your employer both agree, it is a way to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19).
It will apply for a minimum of three weeks from when it’s enacted by your employer. You will remain employed and be kept on the payroll, even though you aren’t allowed to work. If you have been furloughed, you will have received a letter confirming it. Initially the arrangement will run for three months from 1 March 2020.
Companies can claim 80% of their employees’ wages from the government, up to a maximum of £2,500 per person each month before tax. Your employer can fund the remaining 20% if it so chooses but they are not obliged to top up salaries that no longer reach the minimum wage.
Money should be available to companies around the end of April, and then back dated to you from when you first started your furlough period.
More transport businesses are parking up vehicles as work begins to dry up, and are now considering the options for their employees. Where possible some have asked staff first to take holidays before asking for furlough volunteers.
If you have been asked to furlough, there is specific criteria to meet for it to happen. You need to have been on the company payroll since 28 February 2020 as full or part time, on a flexible, zero-hour or agency contract. Even if you’d been made redundant since 28 February, your former employer can rehire you under the furlough scheme.
Your employment rights are retained; if you are ill you are still eligible for statutory sick pay and can be placed on furlough when you’ve recovered. If self-isolating, you are also eligible for furlough.
Furlough only covers basic pay, minimum automatic enrolment pension payments made by your employer, and National Insurance contributions but not bonus or commission.
If your wage differs each month, your employer can choose to base your income on the same month the year before or an average of your monthly wage from the last tax year, whichever is higher.
Once furloughed you can’t do any work for your employer, although you can volunteer to work for your employer as long as you aren’t creating revenue for them or providing a service.
If you’ve more than one employer, you can receive furlough from any one of them. The overall financial limit still applies.
For double bubble you could work for someone else, providing you are not breaching any existing employment contract or coronavirus restrictions.
Be warned, companies are not obliged to keep on any employees once they stop receiving furlough payments. So, does this open the door to cheap redundancies?
No, once government ends furlough, your employer must decide if their employee can return to work, if not then redundancy as per the employee’s contract will kick in, and you’ll still have rights against unfair dismissal and to redundancy payments.