A furlough is a temporary period of unpaid leave mandated by an employer. Here are the employment (and unemployment) benefits you should know about.
Amid widespread closures, cancellations and social distancing, thousands of businesses across Asia Pacific have come to a grinding halt. This has triggered a historic spike in layoffs over the past few months. Increasingly, however, employers are choosing to reduce the financial sting by furloughing their workers instead. Here’s a quick rundown of what being furloughed means – and the benefits furloughed workers are entitled to in Australia, Hong Kong, Singapore and Taiwan.
What is a Furlough?
A furlough does not have a precise legal definition, but generally refers to a temporary unpaid leave of absence from work mandated by an employer. During this time, furloughed workers are required to stop doing any work on behalf of their employer.
Unlike being laid off, furloughed employees don’t lose their job. While employers are not necessarily obligated to rehire, furloughed workers are kept on the payroll and can still reasonably expect to return to their old jobs should they choose to. More important still is the fact that they continue to receive employment benefits such as health insurance premiums during this time.
In other words, furloughed workers have simply been put ‘on ice’ until a company is able to resume normal operations – although what ‘normal’ looks like post-COVID-19 remains to be seen.
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What Benefits Can Furloughed Workers Claim?
In general, any full-time or part-time worker who is furloughed, laid off or had their hours reduced ‘through no fault of their own’ is eligible for local unemployment benefits. In the UK, emergency measures have been put in motion that offer government grants to help businesses cover 80% of their furloughed staff’s wages. National furlough-specific schemes like this are yet to be hammered out across the APAC region, but we’ve compiled a list of government support plans currently available in Australia, Hong Kong, Singapore and Taiwan.
Over the next six months, the Australian government is making AUD 130 billion available to subsidise the wages of employees in businesses that have seen significant drops in turnover of at least 30%. Full and part-time workers, sole traders and casuals who have been with an employer for over 12 months are eligible for a fortnightly JobKeeper payment of up to AUD 1,500, excluding rent assistance and family payments.
Australia’s pre-existing unemployment benefit, JobSeeker, is paid to people aged over 22 who are unemployed or unable to work. Payments are means-tested, which means your income and assets cannot exceed the text limits and you meet their definition. More details on JobSeeker eligibility can be found here.
In light of the recent pandemic, the Hong Kong government has recently announced a new HKD 80 billion subsidy package to prevent mass unemployment. Eligible employers will receive funding (in two instalments) to pay 50% of their employee’s wage, capped at HK 9,000 per month for a period of six months. A one-off grant will be given to around 215,000 self-employed persons who make MPF contributions. The government also unveiled plans in February 2020 to roll out a HKD 10,000 universal handout to all Hong Kong permanent residents.
Hong Kong also offers a Comprehensive Social Security Assistance (CSSA) programme, which provides government-backed monetary assistance to Hong Kong residents in need whose income doesn’t meet a certain threshold. Find out more about CCSA eligibility and the CCSA application process here.
To support Singapore Citizens and Permanent Residents who lost their jobs as a result of COVID-19 or had their incomes severely reduced, the government has promised more flexibility in ComCare’s eligibility criteria, as well as additional schemes including a Temporary Relief Fund and COVID-19 Support Grant. The Ministry of Manpower also introduced a Self-Employed Person Income Relief Scheme (SIRS) that grants eligible SEPs a total of SGD 9,000 in three instalments of SGD 3,000 each in May, July and October 2020.
All employers are still instructed by the Ministry of Labour to pay furloughed workers no less than the minimum wage of NT 23,800 per month to help them maintain their living standards. Taiwan’s Workforce Development Agency has also implemented a programme to subsidise companies that hold training sessions to enable upskilling, with each employee eligible to receive NT 158 per hour for attending a maximum of 120 hours of training per month.
This article was last updated on 15 April 2020.