You need to be classed as furloughed by your company for them to be paying the wages during this period. We've been looking at it for our guys here. We'll gladly foot the 20% of the wage while they're off work and we're shut down, but if not for the Government picking up the remainder then we'd unfortunately be laying people off instead.
Coronavirus Job Retention Scheme
Under the scheme, employers will need to:
– Designate affected employees as “furloughed workers” and notify employees of this change; and
– Submit information to HMRC about the employees that have been “furloughed” and their earnings through a new online portal (HMRC have said that they will set out further details of the information required here).
However, there are a number of complex issues at play here, not least because the Government has made it clear that designating an employee as a “furloughed worker” remains subject to existing employment law and, depending on the wording of individual employment contracts, may be subject to negotiation.
It would seem, therefore, that the scheme will not give employers the automatic right to lay off their employees and expect the Government to pick up the salary costs.
In addition to this, whilst there are clear (but complicated) lay-off rules in the UK, the concept of “furlough” is a US term and is not specifically covered by UK law.
Employers will need to consider the scheme carefully and should take legal advice on the specific impact for their business.