Pay during furlough
Pay during furlough could be less than usual, if agreed between the employer and employee or worker.
The employer may be able to get financial support from HMRC's Coronavirus Job Retention Scheme. Employers can use this scheme to claim a percentage of each furloughed employee or worker’s usual wages.
Flexible furlough must last for at least 7 days in a calendar month for an employer to make a claim.
Furlough scheme changes
Since 1 August 2020, employers need to pay any:
- employer contributions to the employee's pension
- employer National Insurance (NI) contributions
The amount employers can claim was reduced on 1 September. This will decrease again on 1 October.
But employers need to keep paying furloughed staff 80% of their usual wages up to £2,500 per month – or more if that’s been agreed with the employee or worker.
Topping up wages to 100%
The employer should decide whether they'll top up furloughed employees' or workers' wages to 100%, but they do not have to. If the employer decides not to top up the wages, they should explain why.
Redundancy pay and notice pay
When calculating statutory redundancy pay or statutory notice pay for furloughed staff, the employer must use the employee's full normal pay, not their reduced rate due to furlough.
Find out more about:
- pay during the notice period
- your redundancy rights and pay
- working out redundancy pay for employees
Minimum wage during furlough
If furloughed staff are paid 80% of their wages, this might mean they get less than the minimum wage. This is allowed as long as they're not working.
But if someone does any work during furlough, including any training, they must get at least the current minimum wage for those hours.
In most cases furlough pay will cover minimum wage for any hours spent working. But if it's less, the employer must top it up.
If furloughed staff take paid family-related leave on or after 25 April 2020
Their usual, full pay must be used to work out if they're eligible for:
- Statutory Maternity Pay
- Statutory Paternity Pay
- Statutory Adoption Pay
- Statutory Shared Parental Pay
- Parental Bereavement Pay
If someone is paid less during furlough, it will not affect their entitlement to statutory pay.