What Does Furlough Mean? What The Pay Means For Workers During Coronavirus Pandemic
31 March 2020, 11:49
The government announced they will cover 80% of salaries, up to £2,500 a month, for workers who have been affected by the COVID-19 outbreak.
Chancellor Rishi Sunak recently announced that self-employed people facing financial difficulties during the coronavirus pandemic will receive support from the government.
The self-employed income support scheme will give millions of workers a taxable grant worth 80% of their monthly average earnings and will be capped at £2,500.
This comes after the chancellor revealed the government will be there to support workers who have been ‘furloughed’.
But who is considered a furloughed worker? Here’s what we know.
What does furlough mean?
In short, it means an unpaid leave of absence from work.
What are furloughed workers?
Under the Coronavirus Job Retention Scheme, furloughed workers are those who are unable to work due to their places of work closing as a result of the COVID-19 pandemic.
These workers are people who have not been made redundant as a result of the virus, however, have been asked to stop working due to their employers not being able to cover staff costs.
Their employers are now able to access financial support from the government in order to continue paying part of their staff’s wages.
What is furloughed leave?
Workers who are kept on payroll, rather than being laid off.
Furloughed leave means that the employee has left with the intention of returning to work after a period of time - in this case, when the coronavirus is over.
According to the government, furloughed workers should not undertake any work for their employer during the scheme, so that their employers can claim up to 80 per cent of wages for them.
How to claim pay from the government while furloughed
If you are still working, but with reduced hours and pay, you are not eligible to apply for the scheme.
However, any furloughed employee can apply for the scheme, including business, charities, public authorities and recruitment agencies.
To access the scheme, you must’ve already created and started a PAYE payroll scheme on or before February 28, 2020, and have a UK bank account.
Your employer must also notify which employees they have designated as furloughed and submit information to HMRC about their furloughed staff, to set up a system for reimbursement.