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What is furlough?

What is furlough?

Furlough was introduced in March 2020 in response to the Covid-19 pandemic – it’s referred to as the ‘Coronavirus Job Retention Scheme’.

Furlough is a temporary leave of employment granted by the government, which is typically exhausted due to economic conditions.

The scheme was introduced to protect people’s income and keep them from being let go permanently.

What you need to know about furlough?

  • Employees can ask for it, but it’s at the discretion of an employer
  • The involuntary furlough can be short term of long term
  • Employees will still remain on the books of the company, but will be unable to undertake any work for said company
  • Employees (who otherwise wouldn’t be allowed) are able to seek other temporary employment during the ‘furloughed’ period
  • As of May 12th, the furlough scheme was extended to 31st October 2020
  • From August, furloughed workers could return to work part-time (for which, employers will be asked to pay a percentage of their salaries)

How much money do you get?

  • If you are on a PAYE contract, the government will pay 80% of your salary, up to a maximum of £2,500
  • Your company can then top up your salary to 100%, but they aren’t obliged to

More information here.

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