Apr 06

Furlough and Job Retention Scheme FAQs Answered

Reading Time: 8 mins

In the recent weeks of the coronavirus crisis, we’ve received lots of questions from readers about the furlough process and job retention scheme. Here, we’ve put together the most commonly asked questions to help you understand whether you’re eligible for the scheme and what it means for you.

If we’ve not answered your question below, reach out to us on our Messageboards. We’ll get back to you, or if we don’t know we will get one of our specialists to reply.

What is the furlough or job retention scheme?

On 23rd March 2020, Rishi Sunak the Chancellor announced a huge financial support package for businesses. The Job Retention Scheme is part of this £330bn package. To help struggling businesses stay afloat – and be able to reopen after the crisis – the Government will pay 80% of employee wages for at least three months, with a monthly cap of £2,500 per employee. To get this grant, businesses must do something called furlough their workers.

This means they temporarily lay off employees, on the understanding that they can be recalled when there is work for them again. The furlough scheme means small and medium businesses who have had to close or have suffered significant losses due to the coronavirus can essentially pause their activity without losing their staff.

Am I eligible for furlough?

Not everyone can be furloughed. To be eligible, you must:

  1. Have been on the company’s payroll by 19th March 2020
  2. Be a contracted PAYE employee
  3. Not be receiving Statutory Sick Pay (but can be furloughed after you recover).

You can be a zero hours, temporary, or permanent employee to be eligible. If you’re self-employed through an agency or umbrella company you’re also eligible. You must pay tax and National Insurance via your agency to qualify. The agency should furlough you, not the client(s) you’ve been working for. If you’re self-employed but run your own business, read our article about the self-employed income scheme here.

If you’re currently receiving sick pay, you can request to be furloughed once you’ve recovered and should be going back to work.

You can also ask to be furloughed if your company is remaining open for business but you have significant care duties for dependants. Your boss doesn’t have to agree to furlough you; it’s worth asking though!

How your furlough income is worked out

Your wage on the scheme is worked out on your February 2020 basic pay. It doesn’t cover commissions or bonuses that were paid in that month.

If you work irregular hours or are on a zero-hours contract, you can request that your hours from the last 12 months is averaged out. This ensures those who worked fewer hours than usual in February will receive a fair furlough income. If your 12-month average is lower than your February income, you’ll receive 80% of the February income.

National Minimum Wage Doesn’t Apply

The National Minimum Wage only applies to work carried out. It doesn’t cover furlough. So, if you already work for NMW, your 80% furlough pay can legally be less than the minimum wage.

What about zero hours employees?

There was initially a lot of confusion about whether those employed on a zero hours contract would be eligible for the scheme. The short answer is yes.

There are some exceptions, however. For example, if you joined your company in February 2020 but have yet to work any hours, you could technically be furloughed but wouldn’t receive any income.

Seasonal workers, such as exam invigilators, may struggle to get support through this scheme, too. If you’re employed annually or several times each year for short periods by the same employer, you can request your last 12 months’ average salary be provided to the furlough scheme. However, this could mean a much smaller monthly income than you’d normally expect.

Furlough advice for those shielding

Over 1.5 million people in the most vulnerable categories recently received a letter instructing them to ‘shield’ themselves for at least 12 weeks. This means total isolation, not going outside at all including to go to the food shop.

Employers have been confused by this. Those told to shield aren’t sick – so they can’t be paid sick pay. Yet, they are also unable to perform work activities. Some are able to work from home, which means you’ll receive full pay as usual. However, the Government has now clarified that if you’ve been instructed to shield, you can be furloughed. This ensures you’ll receive 80% pay and won’t have to go against Government advice by going to work.

Rights for Parents who Can’t Attend Work

If you’re a key worker, you can still send your children to school. However, the schools are closed to everyone else – which means parental responsibilities have rocketed in recent weeks. If you cannot attend work because you must care for your children, you have a right to request furlough.

Your employer can refuse the request if alternatives are possible – such as working from home. However, if this is not possible, you should be furloughed if you request it.

How do I get furloughed?

Furlough means you can get 80% pay without working

You can’t furlough yourself. You need to ask your employer to do it on your behalf.

They need to apply for furlough. The online system for this isn’t up yet – so businesses will need to temporarily foot the bill for furlough wages. They’ll receive the money back from the Government – and that’ll be backdated to the 1st March or the date they put staff on furlough.

Your employer has to write to you to inform you of the furlough process. They can’t just suddenly furlough you without a written notice! They might choose to pay the remaining 20% to ensure you receive a full salary, but they don’t have to do this. Many businesses are now closed (with no income), and have to pay at least two months’ furlough pay for their staff before receiving the Government grant. This means you might have a struggle on your hands to get your boss to agree to furlough, especially if you work for a small or medium business.

How long will furlough last?

Legally, you must be furloughed for a minimum of three weeks. That means once your employer writes to tell you that you’re furloughed, they can’t ask you to work again for three weeks from the date of the letter.

As for how long furlough will last… it’s a ‘piece of string’ question at the moment. The Government has assured at least three months’ furlough pay in the first instance – for March, April, and May – but this could be extended. Nobody knows when this crisis will be over, or when businesses will reopen. Once things start to relax again, and businesses can operate as usual, the furlough scheme will end.

What if I changed jobs after 19th March 2020?

Unfortunately, the rules stipulate the only people who can be furloughed are those who were on a company’s payroll from 19th March 2020. So, if you ended your old job after that, or started a new job in March, you won’t be eligible for furlough.

Asking your old employer to furlough you

There’s an interesting little loophole here, however. The Government has updated its guidelines to clarify that your PREVIOUS employer CAN furlough you, as long as you were still on payroll on 19th March 2020.

You must have left your old job voluntarily – those dismissed for gross misconduct, or who had a previously-agreed contract end date won’t qualify.

If you left on good terms with your previous employer, approach them to request if they’ll re-hire you. They don’t have to ask you to do any work – they can immediately furlough you. In the long term, doing this won’t cost them as the Government will repay the costs of your furlough pay. Again, your previous employer doesn’t HAVE to do this for you – but it’s worth asking if you can.

Can I work another job when I’m furloughed?


Just as self-employed people can carry on working while they wait for their taxable Government grant, you can find a new job. You don’t have to give up your furlough pay if you get a second job while you’re on furlough.

Bear in mind, however, that your taxes will catch up with you. It’s all going through HMRC, so if you end up earning a lot more than usual because you receive furlough pay AND an income from a new second job, you could pay more tax.

Getting another job is a good way to top up the lost 20% of your income. So, you might want to consider a part-time job instead of a full-time one. Or, you could use the time at home to set up the side business you’ve always wanted to do but have never had the time for. Check out our money-making section for more tips to boost your furlough income.

I’m on Maternity Leave – What happens to me?

Maternity pay and furlough

If you’re on maternity leave and still receiving maternity pay, you’ll get it until it ends. Of course, this could mean you’re getting less than your furloughed employees.

For businesses that have already furloughed your colleagues, you can request to end your maternity leave early and be placed on furlough. This will mean you’re on 80% salary instead of maternity pay. If you’re recalled after the three-month furlough scheme ends, you can’t go back on maternity leave.

If you’re currently pregnant

Women who are currently pregnant must be able to work from home wherever possible. Your employer may set you duties outside of your usual tasks, if those are the only ones that can be completed at home. They cannot request you to work in an office or workplace if it places you at high risk. If you can’t work from home, they need to suspend you on full pay.

Your employer can also furlough you while you’re pregnant. They cannot force you to take unpaid leave if you can’t work, but if you’re sick they can insist you only receive Statutory Sick Pay for the duration of your illness. Your employer also cannot furlough other colleagues but tell you to take maternity leave early – this is pregnancy discrimination. You’re allowed to take furlough if others are being furloughed, until the agreed start date of your maternity leave.

Does Furlough include National insurance and Pension Contributions?

Many were worried that the furlough scheme would leave gaps in National Insurance and pension contributions.

Never fear: your National Insurance record will remain intact and full. The Chancellor confirmed that the Government will pay up to £300 per month for each furloughed employee towards National Insurance and auto-enrolment pension contributions.

If your employer matches your pension contributions above the minimum requirement, they may defer payments for a few months. This means you could see your pension growing slowly for a few months. However, they have to eventually make those contributions – so your pot will go back up to what it should be!

Can I still be made redundant on furlough?

Your employer can make you redundant while you’re on furlough. However, it makes little sense to do this – as the bill for your pay is footed by the Government, not the business.

They may, however, ask you to sign an agreement that you accept you may be made redundant after the furlough scheme ends. This doesn’t guarantee you will be made redundant. It just gives the employer a little extra legal clout if they then choose to do so.

The point of the Job Retention Scheme is in the name: businesses aren’t supposed to make you redundant if they opt for the scheme. However, with all the unknowns facing businesses right now, we can’t make any predictions. Some, for example, may still have to pay rent and business rates while the company is closed. Ongoing costs eat into their bank account month after month. If they don’t have enough in the bank at the end of the scheme, it may not be possible to bring you back to work.

If you’re made redundant after being on furlough, normal redundancy rules still apply. For example, if you’ve got two or more years’ service, you’re entitled to a minimum week’s pay.

Things are constantly changing

Like all of the rescue schemes announced by the Government, some people will miss out on the furlough scheme. We’ve already seen changes to plans – such as the payroll date for furlough moving from Feb to March – and they keep coming.

As things change for certain, we’ll update the article.

For now, what questions do you have about the furlough scheme that we’ve not answered above? Put your question to us, and the MoneyMagpie community, on our Messageboads here.


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Frederick Stevens
Frederick Stevens
1 month ago

I am a vehicle mechanic trainer for a very larger and well known college here in the south west counties. I am currently on furlough however, my employer is asking me to start a course through them, which will obviously benefit me academically but also them financially. Is this legal and am I obliged to start this if I am on furlough?

Lilian Fraser
Lilian Fraser
1 month ago

My daughter’s agency has not approached her or paid 80% for the whole of April They do not appear to be even considering this. It is a large employment agency and I am sure they have approached HMRC reference their own office staff How/ Can she make them pay her as she was paying NI and PAYE with them throughout January February and March, Are they breaking the new government laws/ rules? Many people in this area, Aberdeen, are in the same position as my daughter. A lot of the temporary work here is in the oil industries offices. She… Read more »

1 month ago
Reply to  Lilian Fraser

This is shocking but, sadly, not surprising. We have been hearing about a lot of agencies that are refusing to furlough their workers. It’s bad and unnecessary as they could get the money back from the Government. The only downside for them that I can see is some accountancy difficulties as they try to work out the average amount the workers have each earned so that they can then work out the 80%. Employers (and in this case, agencies) are not legally required to furlough employees but it seems entirely reasonable that they should as they get the money back… Read more »

Angela Rowe
Angela Rowe
1 month ago

my daughter is home from University I have Parkinsons we have been self isolating I am on the broader at risk group but have not had a GP letter. My daughter works for Boots the chemist on Sundays they will nor furlough her without I have a letter. They can only give her gloves as PPE if she goes to work what can she do

1 month ago
Reply to  Angela Rowe

Hi there Angela. So sorry to hear about this. What a difficult time for you all. I think the best thing for you to do is to ring your GP (I know it’s not easy to get through but do persist) and ask him/her to send you a letter. Explain the situation and I am sure that they will want to do whatever keeps you properly safe. I can’t see any reason why the GP would refuse to get a letter to you. Your daughter could even go to their surgery to pick it up. All the very best to… Read more »

Ian McCallum
Ian McCallum
1 month ago

If I am asked to go back to work, after the initial 3 week period of furloughed can I refuse ?

Marc Crosby
Marc Crosby
1 month ago
Reply to  Ian McCallum

Hi Ian,

You’re only allowed to refuse if you’ve been furloughed and are shielding based on a letter from the Govt, or if you have childcare difficulties (i.e., you’re not a key worker and have no other options to look after your children). Otherwise, you can be made to take unpaid time off, or could face redundancy for refusing.

If it’s okay with you, we’re going to share this in our employee forum ( Please do leave any further questions there.

1 month ago

Vital for people to know their rights.

1 month ago

Excellently explained.

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