COVID-19: Furloughed Status

COVID-19 : FURLOUGHED STATUS

On Friday 20th March, the Government announced the Coronavirus Job Retention Scheme.  All UK employers will be able to access support to continue paying part of their employees salary for those that would otherwise have been laid off during this crisis.

We have yet to get the detail behind the announcement, but here is an overview of the scheme:

  • The term ‘furloughed’ means to ask or force someone to be absent temporarily from work, but is not made redundant.
  • Under this scheme, the Government will pay 80% of gross salary for 3 months, up to a cap of £2,500 per month.
  • Can be applied from 1st March and includes anyone on payroll as at 28th February 2020.
  • Will apply to all workers who go through the company PAYE.
  • For those already laid off, you can contact them and ask if they would prefer this alternative.
  • You change the status of affected employees to ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation (similar to lay off).
  • You will be able to submit this information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required). HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
  • Whilst they are ‘furloughed’ affected staff cannot work at all (opposed to lay off, where they can work).
  • Employers can chose to pay the remainder of the 20% to make up their salary to full pay at their discretion. This cannot be claimed back.
  • Length of service and holidays still accrue (as they do during lay off).

It is expected more detail will be announced over the coming days.

If you have any questions, please ask us #coronavirus #employmentlaw #furlough