Update to Employee Guidance on Furlough

04/06/2020

UPDATE – Announced 29 May 2020

The Chancellor announced changes to the Coronavirus Job Retention Scheme on the 29 May 2020 which will come in to effective from 1 July 2020. From this date, employers can bring back employees that have previously been furlough on a part-time basis as required for the business needs whilst still claiming the CJRS grant for the hours not worked.

The scheme will close to new entrants from the 30 June 2020. The final date that an employers can furlough a member of staff is 10 June 2020, as there is the 3 week minimum furlough period which would need to be in place to the 30 June 2020.

They will announce further information regarding the flexible furlough on 12 June 2020

The level of support is to be reduced from August as follows:

Support in June and July

The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything 

Support in August

The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.

Support in September

The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.

Support in October

The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

Original guidance

If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’.

Through the Coronavirus Job Retention Scheme, the Government will pay 80% of salary for staff who are temporarily not working due to the virus. Therefore, your employer could pay 80% of your regular wages through the Coronavirus Job Retention Scheme, up to a monthly cap of £2,500.

You’ll still be paid by your employer and pay taxes from your income. You cannot undertake work for your employer while on furlough.

The scheme, announced Chancellor Rishi Sunak, started from March 1, 2020, and has been extended in it’s current form until the end of July. From August, employers currently using the scheme will have more flexibility to bring their furloughed employees back to work part time whilst still receiving support from the scheme.

For employers to submit a claim for furlough pay for an employee through the scheme, new starters who were on payroll for March 19, 2020 are now included, as opposed to the initial ruling of February 28.

As an employee, you must be notified of the change as an employer officially designates you as a ‘furloughed worker’, and you should not undertake work while furloughed.

Which Employees Are Covered?

HMRC also confirmed over the weekend that the following individuals are covered

  • Employees on any type of employment contract including zero-hours, flexible, part-time or fixed term.
  • Office holders (including company directors) – but only on their PAYE income.
  • Salaried members of Limited Liability Partnerships (LLPs).
  • Agency workers (including those employed by umbrella companies).
  • Apprentices (make sure you follow the guidance on continuing apprentice training and NMW).
  • Nannies and other domestic staff.
  • Limb (b) workers – i.e. those on PAYE not those who are self-employed.
  • Not covered are: Deemed employees – those subject to the off-payroll rules in the public sector. Workers engaged under a contract for services – for example, sole traders being paid gross via an invoice. The Government has released other grants applicable for sole traders, however, including the Self-employed Support Scheme.

This scheme does not apply if you are self-employed or to any income from self-employment. You may qualify for support under the Self-employment income support scheme.

Unable to work due to being sick, self-isolating, shielding or child care issues

If you’re on sick leave or self-isolating because of coronavirus (COVID-19), speak to your employer about whether you’re eligible to be furloughed – you should get Statutory Sick Pay (SSP) as a minimum while you are on sick leave or self isolating. Your employer can furlough you at any time- if they do, you will no longer receive sick pay, but should be treated as any other furloughed employee.

If you are shielding in line with public health guidance or required to stay home due to an individual in your household shielding and are unable to work from home, then you should speak to your employer about whether they plan to place staff on furlough.

If you are unable to work, including from home, due to caring responsibilities arising from coronarivus (COVID-19), such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in your household, then you should speak to your employer about whether they plan to place staff on furlough

Employee updates and taking on another job

Whilst furloughed staff can’t do any work for the employer that furloughed them, employees can start a new job when on furlough and can also undertake training, work on a self-employed basis or as a volunteer.

Employers can also agree to re-employ employees and place on furlough. They’ll still be able to claim a grant to cover 80% of the regular wages, up to a monthly cap of £2,500 if you were on your employer’s PAYE payroll on February 28, 2020.

You can reclaim 80% of compulsory commission from HMRC plus basic salary, excluding non-monetary benefits. This does however only refer to commission from past sales. This is because furloughed employees of course cannot be completing new sales when on furlough.

Company directors can be furloughed but not perform what would be considered normal work for the firm, only statutory duties. There isn’t a rule on only furloughing an employee once; for example, they can be furloughed, brought back to work, then re-furloughed.

Written agreements

Employees must be notified in writing, with the record of that notification kept in writing for five years. The employer must mutually agree with the employee that the employer is designating them as furloughed (there is no work for them due to COVID-19) and what the employer is planning to pay them whilst furloughed.

Eligibility and Claiming

It’s important to note that you cannot apply for the scheme yourself – your employer is responsible for claiming through the Job Retention Scheme on your behalf and for paying you what you are entitled to. Once it has been agreed between you and your employer to put you on furlough your employer must confirm in writing that you have been furloughed to be eligible to claim.

If you haven’t received confirmation, you should contact your employer.

You can find full guidance for specific employee sectors below, including the answers to many questions, including if you do not want to go on furlough.

Government guidance – click here

Reporting Fraud

The Coronavirus Job Retention Scheme forms part of a collective national effort to protect people’s jobs. You can play a vital role by reporting fraudulent claims to HMRC. Fraudulent claims risk the provision of public services and the protection of livelihoods.

If you’re concerned that your employer is abusing the scheme you should report them. This could include your employer claiming on your behalf and not paying you what you’re entitled to, being asked to work whilst on furlough, or making a backdated claim that includes times when you were working.

Prydis

This article was written by Prydis

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