Law guide: Employment

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Coronavirus (COVID-19)

Coronavirus (COVID-19)


Employment and coronavirus

In this section you'll find information and updates related to coronavirus that are relevant to the law on employment.

The UK's response to coronavirus is changing regularly and often very quickly. While we'll continue to make every effort to keep this page up to date, there may be short periods where what you read here is not the latest information available. Where possible we've tried to provide links to official sources, so you can check the current situation.

Furloughing and the Coronavirus Job Retention Scheme

The UK government's Coronavirus Job Retention Scheme allows businesses severely affected by coronavirus to avoid staff redundancies by instead putting them on furlough leave and claiming back 80% of their salary (capped at £2,500 per individual).

The information below is correct as of 27 April 2020.

In a nutshell:

  • The scheme applies to UK businesses, charities and recruitment agencies.
  • The first step to applying is to put staff on furlough leave, which requires their agreement and a change to the terms and conditions of their contract.
  • The government will pay 80% of their salary (up to a maximum of £2,500 a month) while they're furloughed. Currently, the scheme runs until 30 June 2020. Individuals can't be furloughed beyond this date unless the UK government extends it (which it has already done once).
  • Staff must be furloughed for at least 3 weeks.
  • Employers can make claims to HMRC using an online portal.
  • Claims can be backdated to 1 March, although there's some uncertainty around the rules for claiming as far back as that – it's possible, but not certain, that if you've already put staff on unpaid leave since 28 February, you can retrospectively put them on furlough leave.

Qualifying for the scheme

You must:

  • be a UK business that's severely financially affected by coronavirus;
  • have created and started a PAYE payroll on or before 19 March 2020;
  • have a UK bank account; and
  • not receive any public funding (though there are some exceptions to this).

What does 'severely financially affected' mean?

This hasn't been clearly defined and interpretations will vary. However, guidance states that the scheme:

" designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus."

We can't be certain, but this seems to suggest a fairly broad interpretation will be acceptable.

What will the scheme pay?

If your claim is accepted, the government will pay:

  • 80% of a furloughed individual 's monthly wage, up to a maximum of £2,500 a month;
  • the employer's minimum automatic enrolment pension contributions in respect of that 80%, unless the individual has chosen to opt-out or to cease saving into a workplace pension scheme.
  • The employer's National Insurance contributions in respect of that 80%.

Guidance on both the scheme and furloughing are available on

Furlough leave

Here are some FAQs about the key aspects of furlough leave.

What is furlough leave?

It's a new form of leave in UK employment law. It essentially means a leave of absence that both you and your staff agree to. It's meant as a temporary period during which they're required not to work.

Which types of staff can be put on furlough leave?

Any of the following, on any type of contract, provided they're paid via PAYE and were on your payroll (and HMRC were notified of this on an RTI submission) as of 19 March 2020:

  • Employees (including directors with service agreements)
  • Workers under a contract to provide services to you (provided you aren't their customer/client)
  • Agency workers (including those employed by an umbrella company)
  • Apprentices
  • Salaried members of Limited Liability Partnerships; and
  • Company directors (without a service agreement) and other salaried directors of their own personal service companies.

It doesn't apply to self-employed staff.

There are some exceptions to the 19 March on-payroll requirement – see below.

What about staff who've already been let go?

You can still furlough individuals who were on your payroll as of 28 February 2020 (and HMRC were notified on an RTI submission) and:

  • were put on unpaid leave or unpaid sabbatical after 28 February; or
  • were made redundant, or stopped working for you (e.g. resigned to take another job that later fell through), after 28 February 2020. However, you must rehire them first. You don't have to have rehired them before 19 March. This can include individuals you've given redundancy notices to but haven't yet officially left the business, so long as the reason for the redundancies are connected to the pandemic, otherwise it's currently unclear if you can furlough them.

If you gave someone notice of redundancy before 28 February for reasons unconnected to the pandemic, it's currently unclear if they can be furloughed.

If they were on unpaid leave or unpaid sabbatical on or before 28 February they can be furloughed after the agreed or contemplated duration of their leave/sabbatical has ended.

A person on a fixed-term contract can be re-employed, furloughed and claimed for, if either:

  • their contract expired after 28 February 2020 and an RTI payment submission for the person was notified to HMRC on or before 28 February 2020; or
  • their contract expired after 19 March 2020 and an RTI payment submission for the person was notified to HMRC on or before 19 March 2020.

If the person's fixed-term contract has not already expired, it can be extended, or renewed. You can claim for them if an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020.

How are they put on furlough leave?

You can only do it if you both agree to it – you need their agreement because it'll change the terms of their contract. Our new Letter putting a worker or employee on furlough leave is way of recording their agreement.

You must discuss using the scheme with them beforehand. If you intend to use the scheme for 20 or more employees from one place of work, you will probably need a collective consultation process.

Be careful not to discriminate when selecting which staff to furlough. It's likely that you'll be able to justify furloughing staff who are disabled and have high-risk underlying health conditions, or older staff in high-risk groups.

Can furlough leave be rotated or used more than once?

Yes, you can rotate it among individuals, or put them on it more than once (provided each instance is for a minimum of 3 weeks).

Can they do any work while on furlough leave?

No. They can do volunteer work or training, as long as this doesn't provide a service to you or generate any revenue for you.

Can I recover payments for the apprenticeship levy or student loans from the scheme?

No, these cannot be recovered from the scheme and you must continue to pay them.

Can I recover payments made to employees currently on statutory family leave from the scheme?

No. This includes employees currently on maternity leave, paternity leave, shared parental leave, adoption leave and parental bereavement leave.

Can I 'top up' the remaining balance?

Yes, but you do not have to.

If you do, you'll have to pay the amount of their earnings that's not covered by the grant (the top-up amount), plus employer National Insurance contributions and automatic pension enrolment contributions on the top-up amount. The amounts could be substantial if their gross wage is more than £2,500 per month.

What if they have more than one employer?

Each job is separate, and the cap applies to each employer individually.

Can they be put on furlough leave while on sick leave?

They shouldn't normally be furloughed if they're on sick leave for a short time. If you have a business reason to furlough them, they can be furloughed as long as you stop paying them sick pay. Or, you could wait until their sick leave ends before furloughing them.

Can they use their annual leave while on furlough leave?

Currently yes, but this is being kept under review. If this happens, they must be paid their full normal rate of pay (or if their pay varies, their average pay in the previous 52 working weeks, or 12 working weeks for employers in Northern Ireland). This will include any contractual overtime, commission or fees. It will mean you having to 'top up' the 80% grant by paying the additional 20% yourself.

Will annual leave and continuous employment accrue while on furlough leave?


Can you continue with any pre-existing disciplinary action while they're on furlough leave?


How to calculate claims

You should firstly calculate 80% of their salary. Your calculation should include any regular, contractual payments that you must pay. E.g.:

  • Wages
  • Compulsory overtime
  • Fees
  • Commission or bonuses
  • Monetary benefits

There's currently some uncertainty about whether certain types of these regular payments can be claimed. A right to an annual bonus of a fixed amount would, for example, be covered, but this isn't very common. Bonuses are more usually paid if the business or the individual hit certain targets. Earlier government guidance suggested these payments would be covered, but more recent guidance suggests that they are not. It is also unclear how overtime or commission payments should be calculated, where their payment varies depending on the amount of overtime worked or amount of sales made.

Don't include payments that they are not contractually entitled to. This includes discretionary payments (e.g. tips, bonuses, commission) or other payments they only receive if you decide that they should, or if payments are conditional on something being done. Also don't include any non-monetary benefits, like taxable benefits in kind, such as:

  • Company vehicles
  • Private health insurance
  • Non-business travel
  • Entertainment expenses
  • Other business assets that have significant personal use

Calculations differ depending on whether the individual's pay is fixed or varies.

Fixed pay

Use their actual salary before tax, paid in the last salary period ending on or before 19 March, to calculate the 80%. If you've already based your calculation using 28 February (which a previous version of the government guidance said you should), you can still use that date for your first claim.

Variable pay

If you've employed them for 12 months before the claim, you can claim the higher of either:

  • the same monthly amount paid last year in the equivalent month(s); or
  • average monthly earnings from the 2019-20 tax year.

If you've employed them for less than 12 months, you can claim for an average of their monthly earnings since they started work. If they've been employed for less than a month, use a pro-rata calculation for their earnings so far to claim.

Claiming for a member of a Limited Liability Partnership

You must only include payments that are:

  • fixed; or
  • variable, but based on the overall amount of the profits or losses of the LLP; or
  • not affected by the overall amount of the LLP's profits or losses.

Claiming for employees returning from statutory family leave

This includes employees returning from maternity leave, paternity leave, shared parental leave, adoption leave, parental bereavement leave and unpaid parental leave. Their salary should be paid based on earnings received before going on family leave, and not earnings they received while on family leave.

Claiming for employees or workers returning from a period of sick leave

Their salary should be paid based on earnings received before going on sick leave and not the sick pay received while absent on sick leave.

Claiming for those returning from a period of unpaid leave or unpaid sabbatical

Their salary should be paid based on earnings they would have received had they not been on unpaid leave/unpaid sabbatical.

You can use the government's Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme guidance to help with the calculations.

What if 80% of pay is less than the National Living/Minimum Wage?

This is allowed, but if staff need to complete job-related training while on leave, you must pay them at least the National Living/Minimum Wage for the time spent doing it.

National Insurance and pension contributions

Once you've worked out how much you can claim for the individual you've furloughed, use the figure to work out the amount of employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you're entitled to claim for them.

You should read the government guides on claiming through the scheme and working out 80%. Both contain helpful examples about calculating your claim.

We also recommend reading the government Treasury guide to HMRC, which contains the rules HMRC must use when considering claims. There are also sections on what to do if you have reorganised your PAYE after 19 March or for business transfers where the new employer is yet to set up a PAYE scheme.

What to do after you've claimed

Once HMRC have received your claim and you're eligible for the grant, you'll receive the lower of 80% of the furloughed individual's regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on the subsidised wage (unless they've chosen to opt-out or to cease saving into a workplace pension scheme).

It will be paid to you by a BACS payment to a UK bank account.

You must pay all of the grant that you receive for their gross pay to the individual.

No fees can be charged from the money that is granted.

If you're unwilling or unable to pay an individual's salary, you must immediately return their grant to HMRC, including the employer national insurance contributions and pension contributions you received.

Their wages will be subject to Income Tax and National Insurance as usual.

When the scheme ends

When the government ends the scheme, you must make a decision, depending on your circumstances, about whether you can retain your furloughed staff.

If not, you can consider putting employees on short-time working or lay off, others on unpaid leave, or if necessary, start a redundancy process.

Extension to the right to carry over annual leave

The Working Time (Coronavirus) (Amendment) Regulations allow employees/workers to carry over up to 4 weeks' unused holiday leave into their next 2 holiday years.

Previously, only 8 days could be carried over and only if employers allowed it.

As many employers have a 'use it or lose it' policy for any untaken leave at the end of their holiday year, the government has stepped in to prevent workers losing their holiday at a time when they must continue working due to the pandemic.

When announced, the government stated that this change is intended for key workers in industries such as food and healthcare. But the wording of the regulations suggests it's possible it covers other industry sectors as well, as it applies to 'the effects of coronavirus on a worker, the employer or the wider economy or society'. This is presumably intended to help other (non-key) businesses to avoid being short-staffed due to everyone taking leave when restrictions are lifted, so they can operate as usual and get the economy moving again. However, it is presently unclear.

Amendments to right-to-work checks

Right to work checks can now be made:

  • Via video call; or
  • By job applicants and existing workers sending scans or photos of documents via email or a mobile app, rather than sending originals.

You must still make the check and use the Employer Checking Service if acceptable documents can't be provided. The government has also updated its right to work guides.

Health and safety

See our Coronavirus (COVID-19) Health & Safety section to find out about new and existing responsibilities for protecting your staff during the pandemic.


The number of people working from home has soared during the pandemic. See our section on homeworking for the issues you need to think about while staff are working at home.

Data protection and coronavirus

The Information Commissioner's Office has created an information hub with guidance on how to tackle data protection issues regarding COVID-19.

You shouldn't ignore data protection issues during the pandemic – but if you're concerned that your data protection practices might not meet you usual standards or about delayed responses to information rights requests, the ICO have said they won't penalise organisations that they know need to prioritise other areas or adapt their usual approach.

Temporary changes to criminal record checks

England & Wales

The Disclosure and Barring Service has temporarily changed its guidelines for ID checking and subject access requests.

Also, people in eligible roles will be given free-of-charge DBS checks and/or a fast-track emergency checks.

They have also published factsheets and updated guidelines.


Disclosure Scotland has suspended the payment of fees for urgent applications of certain priority workers. Any urgent applications can be made online.

The Coronavirus Statutory Sick Pay Rebate Scheme

This scheme will repay UK businesses the statutory sick pay (SSP) they've paid to eligible workers.

Rules of the scheme:

  • Workers must be eligible for SSP – i.e.: already working for you, earning an average of at least £120 per week and been ill for at least 4 days in a row (including any days they are not working, e.g. the weekend).
  • They must have received SSP when they had coronavirus, because they couldn't work as they were self-isolating at home or are shielding in line with public health guidance
  • You must have a PAYE payroll scheme that was created on or before 28 February 2020 and fewer than 250 employees.

Payments will be limited to a maximum of 2 weeks, starting from the first day they are sick.

Claims will be limited to recovering no more than the current SSP rate of £95.85 per week and you won't need a fit note from a doctor.


You will must to keep a record of all claims made to the scheme. See for more.

Telephone and video Employment Tribunal hearings

In England, Wales and Scotland tribunal hearings are either being postponed or conducted by telephone and video conferencing due the pandemic.

More information is available here. There is also a guide on HMCTS telephone and video hearings during coronavirus outbreak.

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