COVID-19: Updated Furlough Agreement - FREE TEMPLATES

The Government has updated the guidance on the Coronavirus Job Retention Scheme a few times. You may have noticed that obligatory commission pay was initially specifically excluded but now can be claimed through furlough. The date by which the employee has to be on PAYE system to be eligible for furlough pay has been moved from 28 February to 19 March 2020.

The Treasury issued direction to HMRC under the Coronavirus Act 2020 setting out the conditions of the Coronavirus Job Retention Scheme. The conditions implemented by the Treasury direction in some important aspects differ from the guidance the Government previously published. For example, the direction adds that for an employee to be eligible for the scheme, an RTI submission in respect of this employee had to be made to HMRC by 19 March. Nevertheless, the published guidance to the extent where it does not contradict the newly issued direction should be used as a tool for interpreting and clarifying the direction conditions.

A crucial new requirement introduced by the direction is a written agreement (can be via exchange of emails) between the employer and the employee that the employee will cease all work in relation to employment in relation to which the employee is put on furlough.

We have updated our suggested letter to the employee accordingly. The updated version is below and can be used whether or not the employee was previously sent one of our suggested furlough notification letters. The text in square brackets should be changed to reflect your specific circumstances.

Furlough Agreement Template Letter;


Authors: Kiril Moskovchuk

Published: 16 Apr 2020


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