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Jonathan Greenhalgh Technology & IT, Construction / Mechanical & Electrical...

Furlough: What are the rules for the Furlough Scheme in January 2021

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With the country back into another National Lockdown, more and more businesses will look to use the Coronavirus Job Retention Scheme, known as The Furlough Scheme, to help them keep afloat and protect jobs over the coming weeks and months.

What is Furlough?

The word ‘furlough’ means a temporary leave of absence from work. This can be due to certain economic conditions affecting one company or matters that affect the whole country. The term had previously not carried any meaning in UK employment law but was temporarily introduced by the Government in response to the unprecedented situation caused COVID-19. 

The introduction of the Furlough Scheme does not mean that employment law has changed, but simply that this scheme adds to them. Furlough leave has temporarily provided employers with an option to keep employees on the payroll without them working at all, to help reduce mass unemployment. 

How can Furlough help businesses in 2021

Chancellor Rishi Sunak announced late last year the furlough scheme was being extended to April 2021 hoping that businesses would be able to get over this latest spike in the pandemic and avoid making mass redundancies.

What are the Furlough rules for employers?

The updated furlough scheme rules for 2021 are as follows:

  • Employees who were employed on or after October 30, 2020, are eligible to be furloughed.
  • Employers will struggle to maintain their usual workforce because their business has been affected by coronavirus can furlough their employees until April 30, 2021.
  • The furlough scheme will cover up to a cap of £2,500 per month, employers can claim for 80% of an employee’s usual wages for hours not worked by the employee.
  • Employers will still be responsible for paying employer National Insurance and pension contributions for employees while they are furloughed. 

The Flexible Furlough Scheme

Under the Government furlough scheme, the rules state that employers can claim for hours not worked by an employee “for any amount of time and any work pattern”. This is known as The Flexible Furlough scheme. 

There is no minimum furlough period, and flexible Furlough can last any amount of time but the minimum amount of time, unless otherwise stated must last for a minimum of seven days. An employee can also enter into a flexible furlough agreement more than once.

Further information on the Job Retention Scheme is available on the .GOV website. (here)

If you are an employee seeking advice about the furlough scheme click here to read our blog on The Furlough Scheme: Rules For Employees