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What does furlough mean? Furloughed workers and leave definition explained – The Sun

MILLIONS of workers are having 80 per cent of their wages supplemented under emergency measures as the country battles coronavirus.

When Chancellor Rishi Sunak announced the measures, he said the government was there to support the millions of Brits who have been furloughed – but what exactly does the word "furloughed" mean?

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What are furloughed workers?

Furloughed workers are those who are unable to work due to the coronavirus pandemic because their places of work have been forced to close.

They are not people who have been made redundant.

Their employers are now able to access support to continue paying part of their staff's wages, to avoid redundancies.

Mr Sunak has promised to pay up to £2,500 per month in salaries to those who are unable to work as part of the Coronavirus Job Retention Scheme.

What is furloughed leave?

Employers who wish to access the job retention scheme should speak with their employees about classifying them as a furloughed worker.

This would mean that employees are kept on the payroll, rather than being laid off.

According to the Government, furloughed staff should not undertake any work for their employer during the scheme.

This allows employers to claim up to 80 per cent of wages – with a limit of £2,500 per month.

The Department for Business, Energy and Industrial Strategy said: “To qualify for this scheme, you should not undertake work for them while you are furloughed.

“This will allow your employer to claim a grant of up to 80 per cent of your wage for all employment costs, up to a cap of £2,500 per month.

“You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.

“If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.

“We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.”

 

Who can be furloughed and how do I claim my pay from the Government?

Any UK employer can apply for the furlough scheme, including business, charities, recruitment agencies and public authorities.

Employers as varied as easyJet and Premier League clubs Newcastle and Tottenham have already furloughed some of their workers.

However the Government does not envisage making significant payouts to public sector employees as they believe most will continue offering essential services.

Where employers are receiving public funding for staff costs, they will be expected to continue using these funds to pay staff rather than applying for the furlough scheme.

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If you are working at reduced hours and pay, you will not be eligible for furlough and it will be up to your employer to pay you as normal.

You must have created and started a PAYE payroll scheme on or before February 28, 2020 and have a UK bank account.

To access the scheme, your employer must comply with the following:

  • Designate employees who cannot do their jobs due to the coronavirus measures put in place by the Government
  • Notify those employees of their new "furloughed" status
  • Submit information to HMRC about furloughed employees to set up a system for reimbursement and existing systems that will facilitate payments.

Can I take another job while on furlough?

The Government does not prevent workers from taking on other jobs while on furlough.

However, you should speak to your employer first as you are still technically working for them.

Some contracts may prohibit employees from taking up other work, but be subject to negotiation.

Have easyJet workers been furloughed?

easyJet has grounded its entire fleet for two months, meaning the cabin crew has been furloughed.

Four thousand of the company's nine thousand UK workers are now on furlough leave.

From April 1, these staff will not work but will be able to claim 80 per cent of their regular pay from the government.

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World News

Macy’s to furlough most of its 130,000 workers as stores stay shut due to coronavirus pandemic – The Sun

ICONIC department store chain Macy's is furloughing most of its 130,000-strong workforce as "the Covid-19 outbreak continues to take a heavy toll".

The retail firm – temporarily shut since March 18 – announced today that it "will remain closed until we have clear line of sight on when it is safe to reopen".


The chain added that there would be fewer furloughs in its digital business, which is still operational, supporting distribution and call centers.

Macy's had about 130,000 employees as of February 2.

Earlier this month, the firm said it would borrow $1.5billion from a revolving credit facility to brace for the impact from the coronavirus pandemic, which has killed more than 36,000 people across the globe.

The company said it would maintain the "absolute minimum" workforce needed to maintain basic operations across its Macy's, Bloomingdales and Bluemercury brands.

"Our top priority is the health and safety of our customers, colleagues and communities during this unprecedented crisis.

"While the digital business remains open, we have lost the majority of our sales due to the store closures," it added.

Macy's said it had "already taken measures to maintain financial flexibility, including suspending the dividend, drawing down our line of credit and freezing both hiring and spending".

It's also "stopped capital spend, reduced receipts, canceled some orders and extended payment terms, and we are evaluating all other financing options.

"While these actions have helped, it is not enough.

"Across Macy’s, Bloomingdales, and Bluemercury brands, we will be moving to the absolute minimum workforce needed to maintain basic operations.

"This means the majority of our colleagues will go on furlough beginning this week."

Furloughed employees enrolled in health benefits would continue to receive coverage "through May", with the company covering the premium amount.

On a positive note, Macy's said it planned to bring back employees on a staggered basis once business resumes.

The Associated Press reported today that in the retail sector, sales in the US fell 0.5 per cent in February, the largest drop in more than a year.

This indicated that the consumer sector was slowing even before the coronavirus struck with force in America, it added.

Retail sales fall

Economists warned they were looking for even weaker numbers in coming months.

The Commerce Department reported on Tuesday that the February drop in sales was the biggest since a two per cent decline in December 2018. Sales had been up 0.6 per cent in January.

Andrew Hunter, senior US economist at Capital Economics, said that as consumers are already avoiding public places like restaurants and cinemas nationwide – in line with local and national guidance – it looked likely that retail sales would fall sharply in March.

Scores of iconic mall-based chains have announced that they are temporarily shuttering their locations to curb the spread of the coronavirus, including Macy's and H&M.

Malls are starting to follow suit.

For example, Mall of America, the nation's largest biggest mall, said that it would be temporarily closing until at least March 31.

In fact, more than 14,500 store locations are temporarily shutting, accounting for nearly five per cent of retail square footage in the US, according to Neil Saunders, managing director of GlobalData Retail, a retail research firm.

That number would continue rising, the analyst added.

What does being furloughed mean?

To furlough staff means they are temporararily suspended from employment for a specified period of time.

During this period, they do not receive wages.

An employee furlough is when employers tell their staff to take unpaid leaves of absence.

"In other words, they won't work – they won't get paid – but they're still technically employed", explains Business Insider.

Adam Calli, founder of Arc Human Capital, said: "The employer does this to drastically cut costs in times of economic difficulty.

"For many organizations, labor costs (payroll tax and employee benefits) can be 70 per cent of their operating cost.

"That's why this is where they look first to save money the fastest."


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