The scheme applies to any employees of the business, and to other workers who are paid through PAYE such as casual staff, so long as they were on the organisation’s payroll on or before 19th March 2020 and the subject of a Real Time Information (RTI) submission to HMRC by this date. Company directors and salaried members of a limited liability partnership (LLP) are also eligible. Foreign nationals are eligible to be furloughed irrespective of their visa category.
Employees hired since 19th March are not eligible.
The scheme does not cover consultants and contractors who are outside PAYE, who may be eligible for support under the separate Self-Employed Income Support Scheme.
The scheme supports both those employees whose employment might otherwise be terminated on redundancy grounds (or for other reasons), and those who would be temporarily laid off under contractual lay-off powers.
The scheme can also be used where an organisation chooses to re-hire employees who were dismissed on redundancy grounds from 1st March, or who otherwise stopped working for the organisation from this date – for example where an employee resigned to take up a job offer which has now been postponed or withdrawn. In the situation of redundancy dismissals the employer may require the repayment of any redundancy payments which have already been paid.
The scheme does not currently support employees who are put onto reduced hours and pay (short-time working), and both employer and employee may be better off financially if the employee is instead fully released from their work duties for the time being. An option to meet an ongoing need for reduced work activities is to rotate furlough leave between different employees or groups of employees. This aspect of the scheme will change however from 1st July 2020 when “flexible furlough” is introduced (see below).
The scheme cannot be used for employees who were already on unpaid leave before 28th February.
An employer can choose for business reasons to furlough an employee who is currently off sick. If so the employee should no longer receive sick pay.
Shielding employees can be put on furlough, as can employees unable to work because they have caring responsibilities resulting from the coronavirus crisis, such as needing to look after children.