The government has announced the Coronavirus Job Retention Scheme. This FAQ sets out our most frequently asked questions in relation to the scheme. There are many more queries we have support businesses with, so if the answer to your question is not below, please feel to ask and we will be happy to help.
Please note that this scheme has been launched to avoid redundancies. There is one ‘means test’ in order to furlough a member of staff. Do you still have the required work? If the answer is yes, you should not be furloughing staff. Instead, explore if they can work from home. If they cannot work from home and you are what is classed as ‘essential businesses then please ensure that you undertake the precautions outlined by the Government and risk assess. If the answer is no, then proceed with the furlough process.
FAQ – Furlough
|The Scheme||The government announced that (to avoid job losses and redundancies) they would fund an employee’s salary up to a value of 80% capped at £2,500 per month|
|Which business does it apply to?||Any UK organisation with employees can apply.|
|Who does it apply to?||Full-time, Part-time, Agency, Flexi, zero-hours – anyone who is PAYE Any employees who were made redundant after the 28th February 2020 – if they are rehired.|
|How long does the scheme last for?||The scheme starts from the 1st March 2020 and applies to all staff who were on the payroll as of the 28th February 2020. Any employees who joined the business after this date are not eligible.|
|Will this cover the cost of employer National Insurance contributions and employer pension contributions?||
Yes – employers will be able to apply for a grant to cover the Employer National Insurance contributions and minimum automatic enrolment pension contributions on paying the lower of 80% of regular salary or £2,500 per month.
|How does an employer go about furloughing its staff?||Firstly, if there is no ‘lay-off’ clause in your contract the employer will need to seek agreement with the employees. If there are over 20 staff you will need to undergo a collective agreement exercise. Once agreement is made (signed and documented) furlough your employees in writing. Submit information through the online portal. Ensure you write to your employees in relation to their new employee status.|
Can the employees still undertake work on behalf of the organisation?
No – An employee cannot undertake work for your organisation whilst on furlough. Includes providing services or generating revenue.
Is the employees wage still deductible?
Yes – standard deductions apply
|What about staff on unpaid leave. Can they be furloughed||Guidance advises that if the employee was placed on unpaid leave after 28th February, they can be furloughed. |
How can an employer select which employees to furlough when there is some work to be done?
If the work can be carried out from home then this should be the approach taken
Where there is insufficient work, even from home, the employer should treat this process/scheme as it would a redundancy process and consider calling for volunteers in the first instance. Consider all the usual issues of pooling and fair selection. The process will need to be handled correctly to avoid claims, particularly in relation to discrimination
At what point can an employer reengage with the employee to bring back to work?
||When you furlough an employee, this needs to be for a minimum of 3 weeks. After this point, they can return back to work or you can extend their furlough status.|
|Who pays my furloughed employees?|| You will continue to pay your employees the same way. Albeit at 80%. The government will then reimburse you for this. |
Use the salary as of February for permanent employees
Variable pay – 12 months service or more. The same months earnings from the previous year Average of earnings from previous tax year
Variable pay – less than 12 months service Average of monthly earnings overall
|I do have some work to be done, what then?||Note that if you have placed anyone on reduced hours, they are not available for this scheme as you have already taken measures to avoid redundancy. An employee can be brought off of furlough to undertake work after a minimum of 3 weeks.|