What Happens If You Are Furloughed?

Business Closed

It has recently been reported that half of UK companies are now seeking to furlough at least some of their employees in response to the COVID-19 outbreak. This could represent around 3million people, a huge and unprecedented shift for the public sector workforce.

Many of us, though, had never heard of ‘furloughing’ until it began to gain news coverage over the past couple of weeks. If you’ve been furloughed by your employer, or you’re still waiting to hear what will happen, then may be wondering exactly what it all means, and what to do next.

In a nutshell

Being furloughed means that your employer keeps you on the payroll, but doesn’t give you any work to do. You’ll be sent home, and your employer will then apply for you to receive money from the government.

Agreeing with your employer

Man in shirt and tie signing contract

Your employer needs your agreement in order to furlough you. Although it may mean that your wages are decreased – the government will only pay 80% of your salary, up to a maximum of £2500 per month – it is likely to be the best option for most. In many cases, companies will be unable to keep employees on without the extra help from the government, so it may well be a choice between going on furlough and losing your job entirely.

Topping up your pay

If your employer can afford it, then they may agree to top up the 80% pay that you receive from the government with 20% from their own money, allowing you to continue receiving your full salary. While this is not going to apply to the majority of people, we have already heard of several cases. This is within the rules, but companies are not obliged to top you up.

Taking on additional work

Legally, there is nothing to stop you taking on another job when you’ve been furloughed, however you’ll need to speak to your employer about it – many contracts have clauses that stop employees from so-called ‘moonlighting’. Given the circumstances, they may be willing to waive this and let you pick up extra work. You’ll need to have that conversation with your boss or HR department.

 What if I’ve been on sick leave?

Women feeling ill

If your company has closed while you were on a period of sick leave, you’re still eligible to be furloughed. You should continue to receive sick pay until your illness while your illness is ongoing, after which your employer can furlough you if they wish to.

What are my employment rights?

The employment rights for people who have been furloughed remain the same as before – you’re still entitled to things such as sick pay and maternity or paternity leave.

What if I no longer earn minimum wage?

There’s no guarantee that the amount you receive during your furloughed period will meet minimum wage, and employers do not have to top up income to ensure that this happens. This means that those who are on lower incomes, who will be hit hardest by the 20% pay cut, may want to see whether they are eligible for benefits or other support.

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