Coronavirus Job Retention Scheme

*** UPDATED 11/06/2020 ***

The rules of the scheme are changing from 1 J‌ul‌y 2020

From 1 July, you’ll have the flexibility to bring previously furloughed employees back to work part time, you can decide the hours and shift patterns they work to suit the needs of your business – you’ll pay their wages for the time they’re in work and can apply for a scheme grant to cover any of their normal hours they are still furloughed for.

From 1 Au‌gu‌st, you will need to contribute towards the wage costs of your furloughed employees until the scheme ends on 31 Oc‌to‌be‌r.

Part Time Furloughing

From 1‌‌ July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

Employer Contributions

From August, the government grant provided through the job retention scheme will be slowly tapered.

  • in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
  • in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
  • in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
  • in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
  • the cap on the furlough grant will be proportional to the hours not worked.

The Government has stated that “Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis”

The GOV.UK website states:

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).


It also states that “HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.”

We have tried to answer as many as we can in this guide, but please be aware that payroll and employment law are complicated areas and the legal side of things will take weeks or months to be finalised by the government.  You should seek independent advice from a HR specialist or employment lawyer.

When does the Coronavirus Job Retention Scheme take effect?

Furloughed employees must have been on your PAYE payroll on 28th February 2020, and can be on any type of contract, including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts


The scheme has retrospective effect from 1st March 2020 and is expected to apply for three months, so until the end of May 2020. Employers can implement furlough leave immediately.

Do we require employees’ consent to put them on furlough leave?

To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.  A4C have a draft furlough leave agreement which you are welcome to use, email

Can an employee insist on going onto furlough leave?

No. It is the employer’s decision.  The employer can choose whether to implement furlough leave and, if implemented, for which employees it will apply to.  The employer cannot discriminate, equality and discrimination laws will apply in the usual way

Can we ask employees who are on furlough leave to perform some work from home?

No, the intention of the Government is that furlough leave is a direct alternative to redundancy so the expectation is that the employer has no work to give furloughed workers. 

Can we furlough people for part of their time?

No, the essence is that they are sitting at home doing nothing.  If an employee is doing shorter hours then they are not eligible for furlough payments and you should pay them as normal.

What if the employee has more than one job?

They can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Will furloughed workers be given payslips?

Yes, at A4C we will add an additional code to your payroll account and will use this to record payments, rather than using the salary or hourly pay functions.  This will enable us to provide reports on the total amount of furloughed pay.

Will the furloughed payments be subject to tax and NI?

Yes, the payments will be taxable, NIC-able and pensionable (where applicable).

Who pays the Employer’s National Insurance and Employer’s Pension Costs?

The grant will cover the lower of 80% of an employee’s regular wage or £2,500 per month PLUS employer National Insurance Contributions and automatic enrolment employer pension contributions.

How do I receive the grant money from HMRC?

HMRC are working urgently to set up a system for reimbursement, this will be a portal whereby you submit a claim (hence a4c setting up reporting features in your payroll).

When will I receive the grant money from HMRC?

The current expectation is that the portal will be live in April for applications and that payments will come through at the end of May 2020.  The image below, created by the Financial Times, may help to demonstrate the cash flow position:

How do I pay my staff in the meantime?

The expectation is that you have reserves to pay your staff, whilst waiting for the grant funding to come through.  If this is not the case then the government have paused VAT payments for three months, so you could use your VAT money.  Alternatively you could access an overdraft or apply for a Coronavirus Business Interruption Loan.

If borrowing is not an option ask your employees for their permission to agree for their salary payments to be delayed until cash is available.

Who is liable for the wages payments?

The whole essence of the Coronavirus Job Retention Scheme is that it is a funding scheme where the government reimbursees the employer for their liability to pay the salary.

Does an employer still have to pay into their furloughed worker’s pension?

Yes, the employer is not relieved of paying employment costs, so these will still stand.

What about National Minimum Wage?

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW) for the hours they are working.  Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500 even if, based on their usual working hours, this would be below NLW/NMW.

Can I furlough and then unfurlough employees depending on workloads?

If you furlough someone you can then unfurlough them if work picks up, but the expectation is that employers won’t be able to re-furlough them again.  This will prevent employer’s from rotating their staff to take advantage of the government grant.

How do you calculate 80% of pay for salaried workers?

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%.  Fees, commission and bonuses should not be included.

How do you calculate 80% of pay for people whose pay varies?

If the employee has been employed for a full twelve months prior to the claim, you can claim for the higher of either:

  • the same month’s earning from the previous year
  • average monthly earnings from the 2019-20 tax year


If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.

If furloughed, do workers accrue holiday?


Is it fair that someone can be furloughed and be paid to do nothing while others are working?

It doesn’t seem very fair, but we are in unprecedented times and that’s where we find ourselves.

Can maternity / paternity leave be cut short to move from SMP/SSP to receiving furloughed wages?

Yes, it’s believed that this would be okay but then the parent would be expected to return to work when the job retention scheme ends.

Can you increase pay or apply backdated pay rises and then furlough staff?

We don’t know what the anti-fraud measures will be, but if it feels morally wrong then it probably won’t be allowed.  At A4C we will not be doing anything to encourage fraud or which may trigger future HMRC investigations.

I am self-employed, can I receive furloughed wages?

No, this scheme only applies to employees paid via PAYE.  The government has introduced the Self-Employment Income Support Scheme for sole traders and partnerships.

I am a director; can I receive furloughed wages?

The opinion is that Company directors who receive salaries through PAYE can be furloughed and apply for a grant of 80% of their salary during the coronavirus pandemic. A furloughed director will only get 80% of their PAYE earnings, so if some earnings are drawn by dividends they won’t get part of that. 

As with other businesses, such directors would need to have been on the payroll on 28 February 2020 and they cannot work while they are on furlough leave. We do not yet know the extent to which minor directorial duties would be disregarded, or whether the requirement that a furloughed employee should do ‘no work’ would prohibit this.

Where can I go for more information?

To see the government guidance visit

Legal Disclosure

Please note, the information given in this FAQ document is by nature generic and there are a great number of uncertainties and challenges in the current situation.  A4C accepts no liability for any action or inaction taken on the basis of this document.

For further support an advice please speak to an employment lawyer or visit the ACAS website –

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