UK COVID-19 Furlough Sample Letter:
Name of Employee:
Dear [Insert name of employee],
This letter is to formally notify you that your position as [employee’s position] at [company’s name and/specific department] is being temporarily eliminated as a result of the ongoing COVID-19 (Coronavirus) pandemic.
By being designated as furloughed, 60% of your pay [up to £1,875.00 per month], will be reimbursed to [company name] by the government, and the company will contribute 20% of your monthly wage [up to a maximum of £625.00}. You will therefore continue to receive [amount of pay employee would receive] each month.
Please be assured that this furlough is not an action taken due to dissatisfaction with your work performance.
At the time of writing, the length of the furlough period is unknown. We will keep you updated via email.
We thank you for all the contributions you have made to our company/department and hope to see you back at work soon.
If we can offer any advice or assistance, please get in touch with us.
[Insert company position]
[Insert email/contact details]
Furlough vs. Layoff:
When employees are laid off, they may or may not be asked to return to work after a period of time, whereas a furlough is always a temporary suspension, usually with certain benefits. Layoffs occur when permanent changes happen, like if the company closes, restructures, or relocates. Pandemic quarantines could also result in layoffs.
What does it mean to be furloughed?
In the U.K., the government has instituted a policy in response to the COVID-19 pandemic, reimbursing employers for up to 60% of employees' monthly wages to help employers continue paying employees that cannot work due to the pandemic. These employees are designated as "furloughed."
Can employees continue to work under the furlough designation?
No, guidance from the U.K. government instructs workers who are furloughed not to work.
Are furloughed workers still employed?
Yes, employees who have been furloughed are still considered to be employed. Their employers are also required to continue paying National Insurance and pension contributions.
Can an employer fund the difference between the reimbursement and employee pay?
Yes. In response to the COVID-19 pandemic, the U.K. government will cover 60% of furloughed employees' wages, up to £1,875.00 per month. Employers, in turn, are required to pay 20% of their employees' monthly wages up to a maximum of £625.00. Employers can opt to voluntarily make up the remaining 20%.
Do employers have to fund the difference between regular pay and furlough pay?
Yes. As of August 2021, beyond the 60% reimbursement provided by the government per employee, employers are required to pay 20% of employees' wages who were furloughed due to the COVID-19 pandemic, up to £625.00 per month. This means that 80% of employees' wages are reimbursed up to a combined maximum of £2,500.00 per month.