4 April 2020

Furlough Guidance Update : Directors and others

Text of a circular email to clients 4th April 2020

The government have on 4th April issued detailed guidance on the Job Retention Scheme. There is a link to the detailed guidance on our website and summarised here are answers to the main questions which tend to be addressed to us.

1. Company Directors
Where a company considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors' furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provide services (to or) on behalf of their company.

This also applies to salaried individuals who are directors of their own personal company.

Comment: this confirms the advice we have tentatively been giving that you will receive 80% of your (usually minimal) salaries but you must do the paperwork. There is a template furlough letter on our website (dated 28th March 2020) which you can copy and paste to a Word document.

2. If your employee has more than one job
If your employee has more than one employer they can be furloughed for each job. Each job is separate.

Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

3. When your employees are on furlough
You cannot ask your employee to do any work that:

- makes money for your organisation
- provides services for your organisation

Comment: this includes yourself as a Director if you furlough yourself.

4. Working for a different employer
If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.

For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C.