The government are both increasing the schemes scope, while at the same time tightening up definitions in some areas. The scheme is likely to be evolved on a weekly basis, so please make sure you check our updates regularly and also via the links provided in this email.
The critical new information below provides detail on several key amendments on this scheme, which allows you to designate furloughed workers and have the Government pay 80% of their salary directly to your company bank account through BACS. Several areas of the scheme have expanded. Detailed guidance that has already been issued on each area can be reviewed via our LinkedIn feed at the link here.
Please read the below carefully and find the fully expanded information at the link here: It may affect the status of employees currently placed on furlough.It may provide you with the clarity needed to decide if other staff members in a range of situations are now suitable for being placed on furlough.It may affect the calculations you have made on how much each staff member furloughed can receive.
To confirm: The minimum time you can place an employee on furlough is three weeks and you can back date this status to March 1st, 2020. During this time, they cannot work for your business in any capacity, including in a volunteer capacity.Furloughed periods can be consecutive and there is no minimum period that must take place between the three-week minimum.
Furloughed employees can volunteer for another organisation, as long as it is not in a capacity that services any form of contract or supplier status with their employer.Employees that are furloughed must receive written confirmation of this employment status change and its duration. Such a letter must be re-issued for each new period of furlough. A record of these written confirmations must be kept for five-years.
Expansion of eligibility for the scheme: The guidance on the scheme begins by stating: “If you cannot maintain your current workforce because your operations have been severely affected by Coronavirus, you can furlough employees.” As of April 4th, 2020, the guidance now states: “All employers are eligible to claim under this scheme and the government recognises different business will face different impacts from Coronavirus.”The scheme is therefore not restricted solely to those employees who would have been made redundant otherwise. It is designed to give employers the ability to create a reduced and temporary workforce complement, and as such they can make the choice to furlough any employee based on the work coming into the business, and to maximise its efficiency and productivity. As long as the furloughed worker does not work for the three-week period, they can be furloughed.
Employers who made staff redundant or made new hires after February 28th, 2020:
The scheme has also been broadened with this statement: “If you made employees redundant, or they stopped working for you on or after 28th February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme.”
This was previously limited to those who were made redundant after February 28th, 2020.Employees hired after the February 28th, 2020 cannot be furloughed or claimed for in accordance with this scheme.
This specifically means that if you hired a new worker after February 28th, you can advise them that they can apply to return to their previous employer and request their position be reinstated for the length of the scheme. This of course will not always be possible, but for those still on good terms with their previous employer, and now suffering financial hardship as you cannot afford to pay them and they do not qualify for the scheme, it does offer one route to regain a degree of financial security.
Guidance on furloughing apprentices:
It has been confirmed that apprentices can be furloughed but any time they spend training must be paid at relevant minimum wage. There is a link to detailed guidance for employers on breaks in learning, the encouragement of remote learning and keeping records at the link here.
New guidance on calculating staff wages:
For salaried employees, the employee’s actual salary before tax, as of February 28th, 2020 should be used to calculate the 80%.
When calculating pay the following new guidance now needs to be noted by employers: “You claim for any regular payments you are obliged to pay your employees, including overtime, fees and compulsory commission payments.” This would also extend to items such as car and phone allowances as they make up the employees overall contractual and regular remuneration.
To be clear though, payments such as discretionary bonus and discretionary ad-hoc commission payments should be excluded if they are non-contractual. In addition, the cost of non-monetary benefits should also not be included.
These cover taxable benefits in kind and benefits provided through a salary sacrifice scheme. Guidance on calculation for employees whose pay varies:If the employee has been employed for a full twelve months prior to the claim, you can claim for the higher of either: The same month’s earning from the previous year The average monthly earnings from the 2019-20 tax year.
If the employee has been employed for less than a year:
You can claim for an average of their monthly earnings since they started work.If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.
New guidance for employees with secondary employment and for those wishing to start a new position:
The guidance now clarifies that employees may not only continue with secondary employment, but may also start a new job (subject to the employer’s consent).
What this means is that if an employee has been working two jobs prior to February 28th, they can continue with their second employment, even if furloughed in your employment.
It also means that while furloughed in your employment, they can start a new secondary position, but they must notify you of this and provide assurances it will not impact on them resuming their role with your operation following the end of the designated furlough period.
This guidance also provides clarity that an employee who has been furloughed is still free to look for a new position, and if they obtain a new position, can leave your employ for it. Their furlough period must then be updated via HMRC.
New guidance on furloughing employees – following sick leave + unpaid leave, while shielding and to care for children:
Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this. (Please see the previous guidance issue by the IPIA on this specific area, which can be accessed on its LinkedIn feed at the link here).
Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after February 28th 2020. Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this period is finished. Please read the specific guidance on this area at the link above.
There is also new guidance for employees who are shielding in line with public health guidance – or who need to stay home with someone who is shielding – can be furloughed. The specific guidance statement reads: “If they are unable to work from home and you would otherwise have made them redundant”.
The guidance now confirms that employees “that need to look after children” can be furloughed. If an employee is off on family-related leave e.g. they can be designated as a furloughed worker if they would otherwise have been laid off. However, the employer would continue to pay any applicable maternity, adoption, paternity leave. Employers can claim for any enhanced pay under the furloughed worker scheme.
