Furlough rights and responsibilities are still perplexing many of you. I asked Peter Woodhouse, head of business and employment at the legal firm Stone King to answer some of your questions.
I’m caught between two jobs
I resigned from my job before lockdown, but my then employer has furloughed me on the understanding that my new employer is not yet able to offer employment. If the government expects a contribution from my employer then which one? And if my new employer wishes to employ me part time, how does that work under furlough.
The government has explicitly said that employees who were made redundant, or stopped working for a business, can be reengaged and furloughed, so long as they would otherwise qualify, and that HMRC was notified on, or before, 19 March.
From 1 July, furloughed employees will be able to return to work on a part-time basis, but only if they are working for the employer that furloughed them, and only if they started that furlough on or before 10 June. So only your initial employer can enter a part-time furlough arrangement (including paying the employer’s contribution).
Your new employer, if you take up your new role, would not be able to furlough you part-time or otherwise, or enter into any employer contribution arrangement based on the scheme.
One further thing to remember is that the scheme only reimburses costs directly incurred when a trader has to suspend operations for Covid-19 reasons, such as health and safety.
If an employee is re-engaged solely in order to furlough them, as you were, then it is arguable that the cost to your employer is because they decide to reengage you, not because of the effects of COVID-19. On the face of it, that would be a problem for your employer, not you.
What’s the key work start date?
HMRC seems to allow some new employees to qualify for the furlough scheme, while refusing others who started at the same time. Employees who have been registered as employed with HMRC before 19 March can be furloughed, but most people are not registered until they receive their first pay at the end of the first month.
Two of my five employees started work on 1 March, but were only registered for employment on 23 March. We have spoken several times to HMRC and we have written to MPs, chancellor, No 10, but to no avail.
It’s tough that a few days can make such a costly difference, but the rules are unequivocal: For an employee to qualify for furlough they must have been on a UK employer’s PAYE payroll and notified to HMRC on a Real Time Information (RTI) submission on or before 19 March. Previously, the cut off date was 28 Feb. This clearly has consequences for new employees whose first pay was processed at the end of March, but whenever there is a cut off, someone is going to be just the wrong side of it.
I want to work for free for my charity
I work for a charity as a supervisor and counsellor. All the staff have been furloughed, but there is a demand for our services. We want to offer free counselling to help in these uncertain times. The charity will not make any money as all services will be free. The government has encouraged us to use our common sense and take responsibility, so can I go back and work as a volunteer counsellor and supervisor?
No, is the short answer. The rule is that until 1 July, a furloughed employee cannot do work that provides income or services for the employer or another associated business. On that date furloughed employees can return on a part time basis. Unfortunately for you, charities are treated no differently. In May, the government refused a request to amend the scheme to permit furloughed staff to volunteer for their employers. There is a logic to the rule, for it protects staff who might otherwise be required to work full time on 80% of their wages and reduces the risk of fraudulent claims.
Charities did discuss whether furloughed staff could volunteer for another charity on a reciprocal agreement, since the charities would be linked this could breach the rules and carry huge risks.
Draft regulations, currently under consultation, give HMRC the power to raise income tax assessments to recover misused furlough scheme payments and company officer could be held jointly and severally liable for penalties.
Your best bet would be to give your time to an organisation that has no connection with your employer.