Furlough, What Does That Mean For Workers in the UK?
By definition, furlough means to be temporarily suspended or laid off from employment. In 2020, as the global coronavirus pandemic sweeps nations, many workers find themselves in this tight position. In the coronavirus's specific context, the UK government has launched its Coronavirus Job Retention Scheme, which helps support the wages of employees who would have otherwise been laid off. This would mean that the furlough scheme allows businesses and individuals to retain their positions and on the payroll despite being unable to work through the crisis.
Businesses have been hit incredibly hard throughout the global quarantines and lockdowns, making it hard to keep employees on the payroll. As such, businesses who find themselves struggling in these times can claim up to 80 percent of wages for their employees for up to £2,500 per month per employee. These funds can help employers continue to pay their employees and distribute money to furloughed staff.
Unlike being laid off, your employer has decided that you need to be off work for your safety temporarily. You are still paid while you're furloughed, you continue to pay taxes, and you stay employed with the business. However, you are no longer able to work while you are furloughed physically. Being laid off is different, in that you are not paid throughout a layoff period. Layoffs are considered a separation from employment for some time; however, employees who are laid off have statutory rights to claim a "guarantee pay" and a redundancy pay where the situation applies.
Furloughs are temporary periods of being unable to work, whereas being laid off can sometimes be temporary, but it has the potential to be a permanent separation from the business.
The coronavirus pandemic hit the UK and the world by surprise, leaving thousands of businesses to be forced to close their doors with no warning overnight. Businesses like gyms, public pools, travel firms, cafes, restaurants, pubs, and estate agents were forced to close in the wake of the pandemic. Many of these businesses, independently owned, small businesses or otherwise, were left in a position where they were unable to maintain the number of employees they had before.
The hit to business would leave many companies unable to pay employees, and in an effort to save jobs, the furlough scheme was introduced. This scheme supports businesses and individuals to avoid being forced into economic hardships and risk an outright economic collapse. The furlough scheme was designed to prevent a devastating outcome, while so many people were forced to go on leave.
There are conditions to being furloughed if you are eligible. If you switch jobs between the end of February and March 1st, you do not qualify for furlough payment. Additionally, you can get a second job while you are furloughed if the need arises, so long as you can return to your original position when doors open back up again.
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