Update on the Furlough System under the Government Support Scheme.
The Government has now published further guidance on the Job Retention Scheme, which confirms:
- All businesses can take advantage of the scheme.
- The businesses will receive a grant from HMRC and can self-certify that they have furloughed staff members.
- The scheme will initially be open for 3 months from 1st March 2020.
- You do not have to furlough all of your staff, as long as any decisions as to who to furlough are not discriminatory. Choosing the most vulnerable is unlikely to be discrimination.
1) Individuals will pay NI and Income Tax on these payments.
2) 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.
3) Workers on Zero Hour contracts/Flexible working contracts will also be supported through the scheme.
4) The 80% grant is applied to the higher of: (1) the earnings in the same pay period in the previous year; or (2) the average earnings in the whole previous 12 months (or fewer if they have worked for less time than this, including a part month calculation if they were taken in February).
5) Staff who are on the national minimum wage or national living wage will receive 80% of this rate, as they are not actually working during the furloughed period.
6) If you are furloughed you CANNOT work for your employers during this time. But you can be asked to do training from home during the period of furlough; provided this does not yield revenue for the company. Any training must be paid for at least at the minimum wage rate.
7) Those on statutory sick pay will remain on this until they are fit to work and then they can be furloughed. We have prepared a separate article on your obligations to those on maternity leave.
8) You CANNOT backdate furlough. A claim can only be backdated for employees who had already been laid off as of the 1st March, or date thereafter.
9) Anyone employed AFTER 1st March 2020 is excluded from the scheme.
10) You cannot claim any support if your employer has reduced your hours, but not put you on furlough. This scheme does NOT support part time working.
11) Employers CAN top up the 80% to normal salary levels, not above.
12) Employees CAN still be made redundant whilst on furlough, but normal redundancy rules will apply.
13) A worker MUST be furloughed for a minimum of 3 weeks for an employer to be able to claim. Claims can only be made in 3 week intervals. You can rotate staff on furlough as long as they complete this minimum period.
14) To make a claim you will need:
- your ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 weeks). You will need to calculate the amount you are claiming.
- your bank account number and sort code
- your contact name
- your phone number
If you are worried about your business during this difficult time, our expert lawyers are here to guide you through the changing landscape. Call us on 0207 388 1658, or email email@example.com.
Please note that the information contained in this article was correct at the time of writing. There may have been updates to the law since the article was written which may affect the information and advice given therein.