Coronavirus Job Retention Scheme – Updated Guidance: Further FAQs for businesses


On 4 April 2020, the government updated its guidance in relation to the Coronavirus Job Retention Scheme (“CJRS”). These updates have clarified several of the questions that were previously left unanswered. Further to our briefing setting out FAQs in response to the initial CJRS guidance (which you can read here), the below FAQs cover those points addressed by the recent updates.

Have there been any changes to the Government’s approach to the CJRS?

There is a small, but significant, change to the wording in the introduction of the updated guidance. This now states that the scheme is available to businesses who cannot maintain their current workforce because their operations have been severely affected by COVID-19. Therefore, it is important that businesses are able to evidence that the reason for an employee being furloughed is solely related to COVID-19 and not influenced by any other factors.

Are there any updates on who is eligible under the scheme?

The updated guidance provides clarity on several categories of eligibility under the scheme. Notably:

  • Workers engaged by individuals

Workers engaged by individuals, such as nannies or cleaners, can be furloughed provided that they are paid through PAYE.

  • Employees at a company under the management of an administrator

Administrators managing a company are able to access the scheme if there is a reasonable likelihood of rehiring the workers, for example, as a result of an administration and pursuit of a sale of the business.

  • Foreign nationals

Foreign nationals are eligible to be furloughed.

  • Employees who were made redundant or stopped working for a company after 28 February 2020

The guidance clarifies that employees who have stopped working for their employer or been made redundant since 28 February can be rehired, placed on furlough, and their wages can be claimed through the scheme. Employers who are asked to rehire employees who have left a job after 28 February 2020 should consider the risks and commercial implications carefully and seek further advice on eligibility for the scheme.

  • Apprentices

Apprentices can be furloughed, and can also continue to train whilst furloughed. However, businesses will need to consider the Apprenticeship Minimum Wage, the National Living Wage or the National Minimum Wage as appropriate. If there is a difference between the amount claimed for a furloughed apprentice under the scheme and the minimum wage applicable to the individual, then the business must cover any shortfall.

The Apprenticeship Levy should continue to be paid by businesses as usual as the grants under the CJRS do not cover this.

  • Employees on unpaid leave

Businesses can only claim for employees that started their unpaid leave after 28 February 2020.

  • Employees with caring responsibilities

If an employee is unable to work because they have caring responsibilities solely as a result of COVID-19 (e.g. individuals that need to look after children due to school closures), then they are eligible to be furloughed.

  • Employees on fixed term contracts

Employees on fixed term contracts can be furloughed and their contracts can be renewed or extended during the furlough period. An employer should be prepared to show that any renewals or extensions would have been made had there not been the COVID-19 situation severely affecting the business; otherwise this may be viewed as abuse of the scheme and/or the claim will be rejected.

  • Office holders

Office holders paid via PAYE are eligible to be furloughed under the scheme. Boards of directors should consider their duties to their company as set out in the Companies Act 2006 when deciding whether to furlough office holders. Any such decisions should be formally adopted as a decision of the company and noted in the company records.

If a furloughed director needs to carry out certain duties in order to fulfil their statutory obligations then they may do so without breaching their eligibility under the scheme. It should be noted that directors may not do more than would reasonably be deemed necessary in order to satisfy those obligations. Directors should therefore be careful not to go as far as to provide services to or on behalf of their company, as doing so would breach their furlough eligibility.

  • “Limb (b)” workers

A “limb (b)” worker is an individual who is not an employee but performs a role that involves providing personal services to the employer and does not provide those services through a personal services company. Provided that such workers are paid through PAYE, they can be furloughed. This could include GIG workers and individual consultants.

  • Employees on maternity leave, adoption leave, paternity leave or shared parental leave

Employees on family leave remain entitled to statutory maternity pay/statutory paternity pay but can still be furloughed. Any enhanced contractual payment above that statutory level can be claimed for, subject to the 80% rule and the £2,500 cap.

Can a furloughed employee still undertake training or volunteer?

A furloughed employee can do volunteer work as long as that work does not provide services to, or generate revenue for, the business.

The guidance encourages furloughed employees to undertake training but makes it clear that such training must not provide services to, or generate revenue for, their employer. Where the employee is undertaking training requested by their employer and their furlough payment is below the relevant national minimum wage rate, then the employer must top up the furloughed wage to comply with the national minimum wage legislation for the time spent training.

How long do furlough agreements need to be kept for?

The new guidance reiterates that employers must confirm to their employees in writing that they have been furloughed. A record of this communication must be kept for five years.

Which payments can be included when calculating wage costs under the scheme?

Any regular payments that the employer is obliged to pay to an employee can be claimed. This includes wages, past overtime, fees and compulsory commission payments (which we understand means contractual commission). However, discretionary bonuses (such as tips), discretionary commission payments and non-cash payments should be excluded.

Can Benefits in Kind and salary sacrifice schemes be taken into account in calculating an employee’s salary?

No, the reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. In addition, benefits provided through salary sacrifice schemes (including pension contributions) which reduce an employee’s taxable pay should not be included. The cost of any benefits provided to furloughed employees should be borne by the employer and these should continue to be paid in addition to wages paid under the scheme unless otherwise agreed with the employee.

The guidance confirms that COVID-19 will count as a “life event” that could warrant changes to salary sacrifice arrangements, provided that the relevant employment contract is updated accordingly.

Can an employee work for a different organisation during furlough leave?

The updated guidance states that, provided it is contractually allowed in the contract of employment with the original employer, employees are permitted to work for another employer whilst they are placed on furlough. Therefore, as long as the original contract of employment does not prohibit the employee undertaking work for third parties, individuals can take a paid job with another employer. Employers should consider whether this would be a problem where they are rotating employees on furlough or where the employee may be required to come back to work on short notice.

What is still not clear?
  • Although the updated guidance clarifies several points, it does not cover:
  • Whether workers can take holiday during furlough;
  • The rate of pay for any holiday taken during furlough; and

Whether employees are able to engage in a collective consultation without breaking the terms of furlough.

Lidia Poczok

Justin Costley


Miranda Cass


Julia Cockroft


Rachel Arnison

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