Furlough is a form of temporary leave granted to an employee. It is an agreement between an employer and employee to temporarily stop working yet retain their employment status.

During the first phase of furlough, any employee placed on the scheme were unable to work any of their hours.

On the other hand, for the second and current phases, an employee can be put on ‘flexible furlough’ where they work some of their hours and are furloughed for other hours.

Furlough was a response to wave one of the coronavirus in March 2020. The Government had plans to stop the scheme but have had to extend it in response to the virus. Each extension has been labelled a phase. As mentioned above, there are no differences between the phases except that the second and third are allow for ‘flexible furlough.’

The Government will review the furlough scheme in January 2021. Depending on the severity of coronavirus at the time, it may end prematurely or continue until the original deadline (31 March 2021).

A ‘furloughed’ employee is still in employment with the organisation despite not working (producing any output) for the organisation.

On the other hand, a redundant employee is someone who ceases all ties with their employer, and becomes unemployed.

Covid-19 has severely interrupted trade for businesses. The national lockdown back in March 2020, and the current local lockdowns around Great Britain has meant many businesses are shut.

If businesses are closed, there isn’t a need for employees. In usual circumstances, employees would be made redundant. The furlough scheme prevents this and ensures employees continue to receive some form of a wage to help with their living costs.

Furlough allows an employer to claim back 80 per cent of each furloughed employees salary from the Government for the hours the employee is not working.

Yes, £2,500 per month.

No, you still have to pay all National Insurance (NI) and pension contributions.

Without paying the minimum contributions, you cannot put employees on furlough. You will have to take them off furlough and consider other options such as redundancy

Yes, provided they have a UK bank account and are on PAYE.

No, there is no such condition.

No, you can furlough an employee for however long as necessary.

As long as they are on PAYE, you can claim for them, regardless of if they are full time, part time, fixed term or permanent.

The furlough scheme has been developed for businesses that are specifically affected by coronavirus.

You can keep them on furlough throughout phase three (either on full or flexible furlough), provided you have their agreement.

Yes they can. You can even rehire an employee and put them on furlough.

You will have to consider other options such as restructuring the business to accommodate them, retraining them for another role redundancies.

Furloughed hours are hours an employee is not supposed to be working. Therefore, you cannot make them do anything that would help generate revenue or profit. They are allowed to take part in training.

If your contract permits it, you can work for someone else during your furloughed hours. You can also volunteer anywhere.

Yes, you still have to pay tax from wages earnt.

If you were on PAYE payroll on or before 19 March 2020, you can be furloughed provided you started your special leave before 10 June and have returned to work.