Coronavirus – FAQs on the government support for employers
23rd March 2020
The government announced on 20th March its Coronavirus Job Retention Scheme, to help businesses affected by the coronavirus pandemic. There is very little information so far, but this is what I’ve managed to glean:
What is the Job Retention Scheme?
HMRC will reimburse 80% of furloughed workers wage costs up to a cap of £2500 per month (circa £30K). It’s not clear if that is the maximum wage costs (i.e. including NI etc) or just their basic salary.
The scheme is open to all employers for at least 3 months and payments will be backdated to 1st March. There is no news yet as to when/if these payments will commence.
What is a “furloughed” worker?
Don’t worry about the title “furloughed” – this doesn’t actually mean anything in law at the moment. We are working on the assumption that a furloughed worker is someone on your payroll you would otherwise lay off or make redundant due to lack of work.
It covers all workers who are paid via PAYE and systems are being built to release grants to employers.
When will the money be available?
The first payments are promised in weeks, with the system fully operational by the end of April.
How do we take advantage of the scheme?
You will designate which of your workers will be furloughed and then submit information to the HMRC via a new portal which isn’t available yet.
Will the 80% cover all payroll costs?
It has not yet been made clear if the 80% contribution will cover employer NI or pension contributions.
So can we just tell workers that they are furloughed and send them home?
No – you must have a “short time working/lay off” clause in your contracts.
If you don’t have this clause you can only reduce an worker’s hours or pay by consent.
If there is no clause as above, then you have no right to furlough them. However, if it’s a choice between being made redundant and being furloughed I know which one I would take! As usual, we need to carefully communicate with them.
Will I have to top up the 80% to their normal pay?
You can only do this if you have a “short time working/lay off” clause in your contracts.
If you don’t have this clause you can only reduce an worker’s pay by consent.
If there is no clause as above, then you have no right to do that. However, if it’s a choice between being made redundant and being furloughed I know which one I would take! As usual, we need to carefully communicate with them.
If I don’t have the clause in my contracts what should I do?
Do get in touch and I will guide you through the process. We need to approach them to ask their consent.
Can a worker insist on being furloughed?
No, as their employer you make the decision. However, you do need to be careful not to make decisions which could be considered discriminatory.
Can a worker do any work for me if they are furloughed?
No. You will be able to claim only if they have stopped working for you completely.
My mantra is always Communication is Key! During these difficult and challenging times we will need to communicate clearly, well and within the law with all workers to maintain our relationships with them and get through these times safely.
Employment law is continuing to apply during this period so please be careful about how you enforce or apply this scheme. Indeed, any actions you take relating to your employees/workers. Let’s do this avoiding any trip to an employment tribunal in the future!
If you need support and guidance please give me a call (07949 552403) or drop me an email (email@example.com). I may not have all the answers but I will do my best to find them out for you and guide you through this.
Dated: 23rd March 2020
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