Zero hour contract workers’ entitlement to furlough pay

Is it better to be a worker or an employee?

First published on Thursday, Jun 04, 2020

Last updated on Wednesday, May 17, 2023

The coronavirus pandemic has hit many businesses hard. Particularly with managing employees—and considering who to furlough.

To help you out, we have a furlough navigator tool you can use. It offers you a digital location to record your employee information. And that can help make it easier to apply for government grants.

You can also use our coronavirus resource hub, if you need help with any other COVID-19 related issues.

However, what about your zero hour contract workers and their rights? What do you need to do if you want to furlough them?

Well, that’s what we’re here to explain in our guide.

What is furlough pay?

It’s basically a type of temporary leave for an employee, while paying a part of their wage.

Right now, you can claim 80% of your employees’ wages from the Government. There’s a maximum of £2,500 per professional, each month—before tax.

Furlough supports businesses facing the effects of the pandemic, helping to prevent large scale unemployment. So, the Government offers temporary wage payment assistance.

This can prevent stop lay-offs in your business.

As an extra step, you may then choose top up staff pay—if you want. But you must contact the employees you want to furlough before going ahead with any of your plans.

It came into effect from 1st March 2020. This scheme will last for four months (although it may receive an extension).

Are zero hour workers entitled to furlough?

Yes, there’s furlough pay for temporary workers. Individuals must also have been on the payroll since at least 19th March 2020 and have been notified to HMRC through a real time information (RTI) submission on or before 19th March 2020.

Staff who have entitlement to furlough are:

  • Full-time.
  • Part-time.
  • Zero hour.
  • Agency contract.

Okay, to clarify that, zero hour employee rights to furlough are the same as the rest of your full and part-time staff.

As long as they meet the eligibility requirements of the date above—19th March 2020.

Are agency workers entitled to furlough pay?

Yes. Again, if they were on your payroll on, or after, 19th March 2020. There’s also the chance to furlough them more than once. If you need to.

But how much furlough pay is there for agency workers? Well, if they’ve been in employment with you for a year, you claim for the higher from these two options:

  1. The amount they earned in the same month of 2019.
  2. An average of their total monthly earnings from 2019.

What is a Job Retention Scheme?

The coronavirus Job Retention Scheme is another government initiative. It covers your National Insurance and pension contributions of any employees on furlough.

So, yes, that’s along with the 80% salary contribution.

This can have a significant impact on smaller businesses, so it’s important to remember to make a claim. Every business in the UK can do so.

Chancellor of the Exchequer, Rishi Sunak MP, said in April 2020:

“Our Coronavirus Job Retention Scheme supports workers and businesses up and down the UK – and today we’re strengthening it because we will do whatever it takes to support jobs.”

Anyone on the payroll on 28th February 2020 who was made redundant before 19th March 2020 can be re-hired and put on the scheme.

This means the ex-employee must have been notified to HMRC through an RTI submission on or before 28th February 2020.

So, you can claim for employee wages if they’re on temporary leave (furlough).

To make use of the Job Retention Scheme, the Government asks that companies must have:

  • Created and started a PAYE (pay as you earn) payroll scheme on or before 19th March 2020.
  • Enrolled for PAYE online, a process that can take up to 10 days.
  • Aa UK bank account.
  • You can then place them on furlough. And any members of staff who are on this, can volunteer to the NHS.

What about apprentices?

You can also furlough apprentices—this is the same approach as with your other employees. For this to happen, you should be paying them one of the following:

  • Apprenticeship Minimum Wage (AMW).
  • National Living Wage (NLW).
  • National Minimum Wage (NMW).

Need support?

Get in touch with us if you need any help.

With our HR and employment law expertise, we can take you through new regulations during this challenging time: 0800 783 2806.

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