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What does 'furlough' actually mean when it comes to coronavirus?

Photo credit: twomeows - Getty Images
Photo credit: twomeows - Getty Images

From Cosmopolitan

Coronavirus has well and truly cemented itself in our vocabulary (is anybody else predicting it as 'word of the year'?), and with it has come a whole host of unfamiliar phrases and words. From self-isolating to social distancing, another word the government are repeatedly using is 'furlough', but what does it actually mean, and who is it relevant to?

What does furlough mean?

The Oxford English Dictionary definition of 'furlough' is a "leave of absence, especially that granted to a member of the armed services"; to "grant [a] leave of absence to" and to "lay off (workers), especially temporarily."

In this instance, furloughing is being introduced to support firms and businesses who have been hit badly by the coronavirus, and to prevent mass unemployment. It will attempt to temporarily pay the wages of those who can't fulfil their job roles, and help companies to retain them as staff.

Photo credit: CosmopolitanUK
Photo credit: CosmopolitanUK

How is furlough relevant to the coronavirus pandemic?

Due to coronavirus restrictions, restaurants, cafes, travel firms and estate agents are among the many businesses unable to work to their full capacity - if at all. To support those employees who are now unable to fulfil their roles, on 20th March, the UK government announced The Coronavirus Job Retention Scheme.

This offers employers grants to cover 80% of wages for staff on their payroll who are not working because of the COVID-19 pandemic. This grant will cover a maximum of £2,500 per worker per month, until the end of May at least, for those who have been furloughed.

Photo credit: Getty Images
Photo credit: Getty Images

Who can claim a furlough?

Any UK organisation with employees can apply, but in practice it will mainly be private sector businesses and charities that make a claim, as opposed to public sector.

In order to be eligible for furlough, you need to have been on the payroll of the company since at least 28 February 2020 and can be full time, part time, or on a flexible, zero-hour or agency contract. The minimum amount of time you can be furloughed for is three weeks, though reimbursements to companies will not start until at least the end of April, the BBC say.

If your wages differ from month to month, your company should base your furlough money on either your average monthly earnings from 2019-20 tax year, or based on what you earned the same month the year before.

Photo credit: Sanga Park / EyeEm - Getty Images
Photo credit: Sanga Park / EyeEm - Getty Images

How does the furlough scheme work?

In order to avoid their employees being laid off during the ongoing health crisis, employers in the UK can access grants from the government to help pay their wages.

If your employer intends to access the job retention scheme and classify you as a furloughed worker, they will have to:

  • Submit employees who have been furloughed, along with earnings information, to HMRC through a new online portal

  • HMRC will then enrol you on the system for reimbursement, as existing systems are not set up to facilitate payments to employers.

In summary, a HMRC spokesperson said: "The Coronavirus Job Retention Scheme is aimed at those who would otherwise be unemployed as a result of coronavirus."


Cosmopolitan UK's May issue is out now and available for purchase online and via Readly. You can also SUBSCRIBE HERE or read on Apple News+. You can find our podcast 'All The Way With...' on Spotify, Apple Podcasts and the Acast app.

The information in this story is accurate as of the publication date. While we are attempting to keep our content as up-to-date as possible, the situation surrounding the coronavirus pandemic continues to develop rapidly, so it's possible that some information and recommendations may have changed since publishing. For any concerns and latest advice, visit the World Health Organisation. If you're in the UK, the National Health Service can also provide useful information and support, while US users can contact the Center for Disease Control and Prevention.

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