Workers for firms hit by lockdowns or Covid restrictions can now be furloughed until the end of March.
Under the Coronavirus Jobs Retention Scheme, to give furlough its official title, employees placed on leave receive 80% of their pay, up to a maximum of £2,500 a month.
Can I be placed on the furlough scheme?
The scheme pays some of the wages of people who can’t do their jobs because their workplace is closed, or there is no longer enough work for them.
They may also be unable to work because someone in their household has to shield, or they have caring responsibilities due to coronavirus, such as looking after children.
You can be furloughed whether you are on a full-time, part-time, agency, flexible or zero-hour contract.
You must have been on the payroll by 30 October 2020. It is not necessary to have been furloughed before and you keep all your working rights, including annual and parental leave.
There is also some help for people who recently lost their jobs but were not placed on furlough.
If you were employed and on the payroll on 23 September, but were then made redundant or stopped working, you can be re-employed and claimed for by your former employer.
While you are on furlough you can take on other jobs, as long as it doesn’t break the rules of your contract. You can also take part in training, or volunteer for an unconnected organisation.
Since July, employers have been able to bring back employees part-time, and furlough them for the rest. This will continue, and employers will have to pay employee’s wages for the hours they work as normal.
Why has the scheme been extended?
Furlough was due to be replaced by the Job Support Scheme on 1 November.
But as month-long restrictions began in England, including the closure of pubs, restaurants, gyms and non-essential shops, the government said furlough would continue.
Chancellor Rishi Sunak says it will run until the end of March, although the government will decide in January whether employers should start paying into the scheme.
What help are self-employed getting from government?
What does furlough now mean for employers?
While employees won’t notice any difference in their pay packet, the scheme has become more generous for employers, who will pay less towards it.
In recent months, firms have had to top up furloughed wages by 20%, with the government paying 60%. Now, the state will put in the full 80%, with the employer only covering pension and National Insurance contributions.
While the government updates the system, employers will submit their wage claim to the government, and be refunded afterwards. After that, they will be paid upfront to cover the cost.
Chancellor Rishi Sunak has confirmed the scheme will still apply throughout the UK, saying the country had “a Treasury for the whole of the United Kingdom”.
About 10 million jobs have already been claimed for, with an estimated two million people still on furlough at the end of October.