Introduction to this document

Letter designating employee as fully furloughed

To be eligible for a grant under the Coronavirus Job Retention Scheme (CJRS) where the employee is on full furlough, you must agree with them the full furlough arrangement, confirm that agreement in writing and keep a record of this communication. Use our letter to confirm the agreement.

Formal notification

Once you’ve obtained an employee’s consent to full furlough (see our Letter Seeking Agreement to Full Furlough), you’ll then need to notify them in writing that they’ve been designated as fully furloughed and you must keep copies of all your correspondence for five years. This is where our Letter Designating Employee as Fully Furloughed comes in. It simply cross-refers to your earlier letter and the employee’s signed consent form and then formally confirms that they’re now fully furloughed from whatever date you proposed. This constitutes a temporary variation to their employment contract.

Amount of grant

Under the extended CJRS, which is open until 30 September 2021, the fully furloughed employee continues to receive 80% of their usual pay, subject to a gross monthly cap of £2,500. However, until 30 June 2021, the employee’s wages were paid by the government by way of a CJRS grant. You only needed to pay employers’ NI and the minimum auto-enrolment employer pension contribution on that reduced subsidised wage. For periods in July 2021, CJRS grants cover 70% of employees’ usual pay for furloughed hours, up to a cap of £2,187.50. In August and September 2021, this is then reduced to 60% of employees’ usual pay, up to a cap of £1,875. You need to continue to pay your fully furloughed employees 80% of their usual pay during this time, up to the £2,500 monthly cap. This means that, for periods between July and September 2021, you need to fund the difference between this and the CJRS grants yourself. You can choose to top up an employee’s wages, e.g. to 100%, but you are not obliged to do so under the CJRS.