Coronavirus Job Retention Scheme

The information on this page was last updated on Monday 30th March

More details regarding the Coronavirus Job Retention Scheme will be released but below is what we know so far. Please contact your local HR Dept for advice on furlough and how the below might apply to your business.

Q. What’s the difference between Furlough and lay off / short time?

Employers can impose short time working or lay off if they have a clause in the employee’s contract. Or, in these difficult times, with the employees agreement. The rules around lay off are complicated and allow the employee to be laid off for 5 days in a three month period, the employee may be entitled to a statutory payment of £29 which will increase in April. With Furlough the consenting employee can do no work but will receive 80% of their salary, which the business can claim back from the Government.

Q. Can an employee work from home and still claim the 80%?

The guidance states that employees must not do any work for their employers whilst furloughed. It states:

“A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.”

This means that if you ask the employee to conduct some online training, for example, then this would be ok but you must ensure that the employee receives at least National Minimum Wage/National Living Wage for the training time.

Q. Can an employee who is furloughed check emails to just forward on anything that needs doing to their colleagues who are working?

This might be deemed “providing services” so our advice is not to allow your employees to do any work whilst they are furloughed.

We hope to receive further guidance and clarity on these points and will publish here if that happens.

Q. My employee is off sick with COVID-19 at the moment, can I furlough them instead to get 80% of their costs paid?

No. If they are off sick you should pay statutory sick pay and that can be reclaimed from the Government. This can be reclaimed for the first 2 weeks only and is eligible for businesses with up to 250 employees. If their contract allows for company sick pay, that is your responsibility and is not eligible for reimbursement under the Job Retention Scheme.

Q. Is every business eligible?

Yes. It applies to all businesses who employ staff through PAYE.

Q. How do I designate employees as furloughed?

This depends on whether or not the employee has a lay-off clause within their employment contract. If there is a lay-off clause then an employer can make the decision to furlough or lay-off an employee.

If there is no lay-off clause in the employment contract then the employer will have to agree with the employee to be furloughed. If the employee does not agree then there are other options but you should contact your local HR Dept office to discuss.

Q. How do you decide who to Furlough if have enough for one person in a team of five (for example)?

You would keep your best, most productive, efficient person and Furlough the rest. Think about how you would apply a redundancy criteria. It will also help justify your selection if you need to make redundancies further down the line. Your local HR Dept office can help you with this

Q. How much can I claim?

The guidance states a maximum of £2500 per furloughed employee plus employment costs such as pension and employers NI. We advise you speak with your accountant for clarity.

Q. How do I claim?

Submit information to HMRC and individuals earnings via an online portal, which HMRC are in the process of setting up. We expect this to be live by the end of April 2020.

Q. Do I have to pay the extra 20% to top up employees pay to 100%?

It depends on the terms of your employment contract with your employee. If there is no contractual right to lay off, then you may have to top up to 100% which is why it is important to negotiate this with your employee. Many of our clients will have a lay off clause in their employment contracts, but please contact us for advice on your particular circumstances.

If there is a lay-off clause in the contract, then you won’t have to top up to 100%.

Q. Can an employee choose to be furloughed on 80%?

No. The employer has to agree so only furlough an employee if this is appropriate for the business.

Q. We have made redundancies already, can we reinstate the employee and bring them back to take advantage of the scheme?

Yes you can.

Q. How long is the scheme open for? 

Three months but could be extended depending upon the circumstances.

Q. How long does an employee have to be furloughed for? Can it just be a day or is there a minimum period of time?

The minimum period of Furlough leave is 3 weeks per employee.

Q. We have a parent who can’t work from home but they have to be at home with their child, they are currently on indefinite unpaid leave. Can we furlough them instead?

No because the principal reason for their absence is no childcare. If this changes and they advise you that they are free to return to work, then you may be able to furlough them depending upon the circumstance at the time if they are not needed.

Q. Can an employee return early from maternity leave and benefit from being Furloughed?

They would need to give 8 weeks’ notice as per the normal maternity leave rules but could be on return if this situation is ongoing. Normal maternity rules will still apply.

Q. We have heard that some people will receive direct instruction to self-isolate for 12 weeks by letter in the coming days. If they cannot work from home, does that mean we must furlough them?

Yes. Only those who receive a letter advising them to ‘shield’.

Q. Can an employee retract their resignation and be Furloughed?

No, we advise against this, even if the employee’s job that they were moving to has been retracted. There is no obligation for employers to accept a resignation retraction. We can Furlough an employee until their leave date though if there is no work available for them to do during their notice.

Q. If an employee is Furloughed, can they get a job elsewhere?

No.

Q. If an employee has more than one job, can I Furlough them?

Yes you can Furlough them from the job they have with you, but they will not be able to pick up extra hours with the other employer and still be Furloughed.

 

 

 

 

 

Do you run a business and have a HR question about coronavirus?

The HR Dept provide outsourced HR support to employers. If you are an employee we would suggest that you contact Acas.

Looking for expert HR support?

We can help you focus on your business by taking care of all your human resources needs.

Let us know how we can help or ask about our free initial HR review.

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