What is furlough and what it means for you as an employee

As part of the government’s support package for Coronavirus, they have agreed to support businesses by paying 80% of employees’ wages, if they are put on furlough. Helping to support the economy, businesses, and individuals during Covid-19.

But, as an employee, what does furlough mean for you?

What is furlough?

If your company is unable to operate or they have no work for staff to do during the pandemic, workers can be put on “furlough”. This prevents employees from being made redundant by keeping them on the payroll.

What does furlough mean?

Through the government’s Coronavirus Job Retention Scheme, your employer can continue paying 80% of your wages, up to £2,500 a month, so you can be kept on the payroll. Your individual employer can agree to pay the extra 20% of your wage but they don’t have to. 

It’s important that both you and your employer agree to put you on furlough and your employer must confirm in writing that you have been furloughed in order to make a claim. 

A furloughed employee on their laptop at home

What happens if you are furloughed

If you are furloughed, you are not allowed to work for your company even if you can or you want to. Instead, you can volunteer or do training as long as you’re not making money or providing services for your employer. 

How long does furlough last?

If your employer places you on furlough, you will need to be furloughed for a minimum of three weeks. Whilst the scheme is still open your employer can place you on furlough more than once and it can be back to back periods. 

The furlough grant is still subject to income tax and national insurance in the same way your wages would be. Likewise, the minimum automatic pension contributions continue to be paid.

How do you claim your furloughed pay? 

The good news is you don’t have to do anything to receive your furloughed pay. Your employer can claim this grant from the government, although they will not be reimbursed until the end of the month. The online service is still not available, but the government suggests it should be up and running by the end of April and claims can be backdated until the end of March. 

What if you get sick?

Whilst on furlough you have the same employment rights as when you are working, so you are eligible for statutory sick pay.

What it means if your company is furloughing with the help of Wagestream

Have a look at how Wagestream can help you get your furloughed wages here.

In response to the furloughed worker scheme, we are facilitating instant payment of up to 50% of employees ‘furloughed’ income. 

This means that your employer can provide immediate financial support for you during this time. Find out more about how your employer can help here