The UK government has launched an initiative to help pay your staff during the COVID-19 crisis.
It’s called the Coronavirus Job Retention Scheme, and it could help you avoid lay-offs or dismissals in your business. Read on to find out how to access this funding or contact a Peninsula expert for support…
We’ve opened our HR helplines to give employers affected by COVID-19 access to a free advice call. So, for fast answers to questions on furloughs, lay-offs and the Job Retention Scheme, call 0800 028 2420
What is the Job Retention Scheme and furlough?
It’s the government’s new scheme that will pay for most of an employee’s wages while they are on furlough. But what exactly is a ‘furloughed employee’?
Normally, an employee on furlough takes a period of temporary leave and receives no pay. They stay on your books, and you can bring them back in when you need them.
Under the proposed Job Retention Scheme, if you need to furlough employees due to the COVID-19 crisis, the “no pay” element will be overridden and the government may pay 80% of your employees’ wages up to £2,500 per employee per month.
The Scheme will run until the end of October but there will be some changes after July. From August, employers will be able to bring employees back from furlough on a part-time basis and still claim assistance from the Scheme to keep employees’ pay at 80%. More details on how this will work are expected by the end of May.
Which employees can you furlough?
You can furlough any employee as long as they’re on PAYE, were on your payroll on or before 19 March 2020 and had been notified to HMRC via a RTI submission on or before 19 March 2020.
It’s your choice who goes on furlough. However, employees cannot be made to work while they’re furloughed, even if they’re on short-time working.
When you need to select employees for furlough, it may be best to ask for volunteers across the workforce. If any high-risk employees who had previously been risk assessed as fine to be in work put themselves forward, it may well be appropriate to choose them first.
Provided they are PAYE, you can also furlough salaried directors, members of LLPs, apprentices and those who fall into the employment status of ‘worker’.
There is no maximum or minimum number of employees who can be furloughed.
How do I apply for the government grant to cover furloughed employee wages?
Organisations need to designate which of their workforce will be furloughed and then submit this information, along with each employee’s earnings, to the HMRC through an online portal. You will then receive a grant to cover 80% of their wages.
The government launched the online portal on 20 April 2020 and employers can claim grants now.
When will I get the government grant under the Job Retention Scheme?
You can make a claim to HMRC’s online portal now for all of your furloughed employees, provided there has been a minimum of 3 weeks consecutive furlough for each employee claimed for. Grants can take up to 6 days to be paid in your organisation’s back account.
Will zero hours employees have their wages covered through the government grant?
Yes, they will, provided they are PAYE. The government’s aim is for the scheme to have as broad a scope as possible.
What’s the shortest amount of time I can furlough someone for?
To claim the government grant, furlough must be for at least three weeks.
Can I force employees to furlough?
If you don’t have a contractual right to furlough employees, you will need to get employees’ agreement before you do it. It isn’t likely that your employees will say no if the potential alternative is unpaid lay-off or redundancy.
Can I furlough someone more than once?
Yes. This means you can rotate employees around periods of work and furlough. Each period of furlough must be at least three weeks long to claim the grant for that period. When on a period of furlough, employees can’t do any work for you.
Can I furlough people on sick leave?
Sick leave and furlough are interchangeable, but cannot be taken at the same time. So, if your employee is too ill to work, you can choose to keep them on sick leave and pay them Statutory Sick Pay (SSP) or put them on furlough. If you decide to continue with sick leave, you can't claim your employee’s wages back through the Job Retention Scheme. However, you may be able to recover the SSP.
Do I have to pay wages to employees first before claiming back?
In most cases, yes. The grant will act as a reimbursement of wages paid.
What parts of wages can I claim?
You can claim a grant to cover anything that you are obliged to pay your employee. However, you can’t claim money for things like bonuses or commission where they are discretionary. You can’t claim for non-cash benefits or benefits in kind either.
Can I offer someone a couple of hours of work a week during furlough?
No. The employee must do no work for you while on furlough.
Can the 80% wage fall under National Minimum Wage?
Yes. National Minimum/Living Wage is a rate payable for hours worked. During furlough, no hours are worked and so the minimum rates do not apply.
Do I have to let ex-employees come back?
No. You can re-hire and furlough any ex-employees who left after 28 February 2020 if you want to. The ex-employee must have been on your payroll on 28 February 2020 and have been notified to HMRC on a RTI submission on or before 28 February 2020. This means a RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020. You can also re-hire anyone who left on or after 19 March 2020 but they must have been on your payroll on 19 March 2020 and have been notified to HMRC on a RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020. But it’s entirely your choice.
Can my employees get a new job somewhere else when on furlough?
Possibly, but your normal rules on second jobs will still apply. So, if you allowed staff to take on extra work before they went on furlough, then you can allow it while they’re on furlough, too.
Can an employee take annual leave when on furlough?
Yes, but you must pay the employee their normal wages during annual leave. You will only be able to claim back 80% of the pay so must fund the extra yourself.
Claim your free advice
The situation in the UK is changing fast, so keep checking the GOV.UK website for the latest guidance.
In the meantime, to get specialist advice on how to furlough employees and manage the impact of COVID-19 on your business, call our HR advice line for free on 0800 028 2420
Disclaimer: This blog was posted on the 09/04/2020. As the situation in the UK is developing rapidly, always remember to check in with your HR adviser or the gov.uk website for the latest updates.