Updated Government Job Retention Scheme (Furlough) Guidance

What Does ‘Pay’ Include for the JRS?

Pay includes any regular payments that the employer is obliged to make to employees (which includes overtime and commission payments). However, pay does not include any discretionary payments.

Pay does not include the cost of any benefits given to staff.

Further, where an employee is within a salary sacrifice agreement, the amount of pay sacrificed will not be included as pay for the JRS. However, Government acknowledges that COVID-19 is a key lifestyle event, so that employees can opt out of salary sacrifice scheme.

 Agency Workers

The agency will normally agree furlough with the worker (not the client).

Where the worker is employed by an umbrella company then it is the umbrella company that should agree furlough with the worker.

For workers being supplied through mini umbrella or ‘outsourcing’ arrangements, it is inferred that it is their small employer that should agree the furlough with the worker.

 Directors can be Furloughed

Where a director is to be furloughed, the decision should be noted in the company records and communicated in writing. Directors can still undertake essential statutory duties, but they should not undertake any activities that could generate revenue for the company.

This also applies to individuals who are the owner/director of their own personal service company (PSCs).

Furlough Communications

There should be a communication will all furloughed workers. Records of this must be kept for 5 years.

The updated guidance can be found here.