Can you work while on furlough? Rules for furloughed workers explained - and all the changes up to October
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The government introduced a series of emergency measures in response to the pandemic to help support workers through the crisis, including the Coronavirus Job Retention Scheme.
The scheme offers grants from HMRC to all UK employers who need help to pay the wages of staff who would otherwise be made redundant, funding 80 per cent of their salary, up to the value of £2,500 per month.
The scheme was originally meant to end in June but has since been extended by the Chancellor until the end of October, although a number of changes will be introduced over the coming months, including asking employers to start making contributions.
Can my employer furlough me and ask me to keep working?
Previously, if you were placed on furlough by your employer you should not have undertaken any work for them during this period.
However, since1 July UK employers are able to bring back furloughed staff to work for any number of hours or shift pattern, while still being able to claim the grant for any hours not worked.
When staff are working as normal, their employer will be responsible for paying their wages. However, if workers are still placed on furlough for part of the week, the government will pay the wages for the hours worked.
It means that employers who cannot afford to pay their staff a full wage can welcome them back to work, without leaving them out of pocket.
The three week rotation rule was also scrapped in July, which states that if workers are placed on furlough, it must be for a minimum of three weeks, and the scheme closed to new applicants on 30 June.
July marked the final month that the government covered the cost of other employer contributions, including National Insurance and pension contributions.
Can I work for anyone else while I’m furloughed?
Furloughed employees may be able to work for another employer, providing it does not breach their contractual obligations with their current employer.
Individuals should only work outside of the hours they would normally work in their usual job.
Taking on a weekend or evening job may not breach obligations if your contract stipulates a 9am to 5pm working day.
Can I do any volunteer work?
You are allowed to take part in volunteer work while you are furloughed, as well as training, so long as the work does not provide services to or generate revenue for, or on behalf of your organisation.
If you are required to complete online training courses while on furlough, you must be paid at the National Living Wage or National Minimum Wage for the time spent training, even if this is more than the 80 per cent of your wage that has been subsided.
How much money will I get?
Furloughed workers will receive at least 80 per cent of their usual monthly earnings, up to a maximum of £2,500.
When the government works out your normal pay they will not include any commission or bonuses you might normally get.
Your employer will deduct Income Tax, National Insurance contributions and any other other deductions that they would normally make.
The grant will start on the day you were placed on furlough and this can be backdated to 1 March.
Can I be made redundant?
Your employer can still make you redundant while you are on furlough, or afterwards.
However, your employee rights are not affected while on furlough, including your redundancy rights.
Can I apply for Universal Credit if I've been furloughed?
If your salary is reduced as a result of being furloughed, you may be eligible for support through the welfare system, including Universal Credit.
Universal Credit is a payment that is made to help those who are on a low income, or out of work, with living costs.
It is paid in monthly installments, or twice a month for some people in Scotland.
The criteria for claiming Universal Credit includes the following:
This criteria includes the following:
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
To apply for Universal Credit, you will need to complete an application form online.
To do this, you will require:
- your bank, building society or credit union account details (call the Universal Credit helpline if you do not have one on 0800 328 5644)
an email address
- information about your housing, such as how much rent you pay
- details of your income, such as payslips
- details of savings and any investments, like shares or a property that you rent out
- details of how much you pay for childcare if you’re applying for help with childcare costs
You will also have to verify your identity online, either via a driving licence, passport, or a debit or credit card.
If you and your partner live together, you will have to apply as a couple, even if you are not married.
What changes will be made up to October?
Here are the changes that will be made to the scheme in the coming months:
From August, workers will continue to receive 80 per cent of their wages, up to a cap of £2,500 per month, for the hours an employee is on furlough, but their employer will have to pay the additional contributions. This includes National Insurance and pensions.
From September, government contributions will drop to 70 per cent of staff wages, up to a cap of £2,187.50 per month, for the hours an employee is on furlough. Employers will pay the difference to bring the payment up to 80 per cent.
From October, government contribution will drop further to 60 per cent, up to a cap of £1,875 per month, for the hours an employee is on furlough. Employers will then pay the difference so that workers still receive the full 80 per cent of their wage.
On 31 October, the furlough scheme will come to an end.