Furloughing – (Coronavirus Job Retention Scheme)
Note this guidance has potential for change and all decisions should be checked against the Government’s latest advice. https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
High level summary:
- You can only furlough people who were on the payroll as at 28 February 2020. The scheme will be backdated to 1 March 2020 and run for three months from that date. It will be extended if necessary.
- Employers should discuss with their staff and make any changes to the employment contract by agreement. There is no suggestion that obtaining such consent is a prerequisite to the employer being able to make a claim.
- Workers cannot do any work for an employer that has furloughed them. They can volunteer for any other organisation but their own.
- Furloughed employees can engage in training, if in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation. However, time spent training, at the request of their employer, is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020.
- Any employees placed on furlough must be furloughed for a minimum period of 3 consecutive weeks. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.
- The system will be managed through an online portal being set up by HMRC. This is due to be available at the end of April.
- The scheme is open to those employed on zero-hours contracts and agency workers.
- If you are furloughing 20 or more employees at one establishment you do need to submit an HR1 form and consult.
- To qualify, the business case for applying to the scheme must be genuine as HMRC has said it will be on the lookout for any businesses abusing it. The test is – would that worker or employee have been otherwise laid off or made redundant? Guidance does not provide a steer on how bad things must be in order to qualify.
- Best practice is to look at organisational NEED, ask for volunteers and/or use a skills matrix when deciding who to furlough.
- Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed
- You can claim for furloughed employees who are shielding (or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.
- Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.
- If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme.
- The latest guidance from ACAS says that staff can take annual leave whilst on furlough as long as they are paid their usual pay, in full, for any time that that they take as annual leave. So there is no need to take staff off furlough in order to take annual leave. If organisations are topping up to 100% then annual leave will be booked and taken as normal during this time. If they are paying at 80%, then they will need to top-up to 100% for any days of annual leave taken.
- In most situations, employees and workers should use their paid holiday (‘statutory annual leave’) in their current leave year. This is 5.6 weeks in the UK.
- This is important because taking holiday helps people:
- get enough rest
- keep healthy (physically and mentally)
- If an employee or worker is temporarily sent home because there’s no work and the employer intends to claim for their wages under the Coronavirus Job Retention Scheme (‘furloughed’), they can still request and take their holiday in the usual way. This includes bank holidays.
- Employees and workers must get their usual pay in full, for any holidays they take.
- Staff continue to accrue holiday whilst on furlough.
Key messages from the latest Pay & Rewards Webinar
- Securing hearts and minds of employees is essential and will help organisations get back up to speed more quickly. If you can afford to top up it is worth strong consideration.
- Some organisations are removing the £2,500 cap and topping up to 100% to support people.
- Most organisations are delaying their annual pay increases until later in the year.
- Be alert to the medium and long terms effects of your short-term decisions, especially around the engagement of your staff.
- Keep an eye on the impact of your decision’s in relation to gender pay gap; equal pay etc.
- A focus on employee wellbeing is essential to ensure they are “fit and well for service or they can work as normal when required”
- Focus on recognition is important, some organisations are giving an extra day(s) during 2021
- Important to keep your furloughed people engaged with the organisation “furloughed but not forgotten”