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Furlough - Updated Guidance For Employers as of 26 March 2020

View profile for Natasha Johnston
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Last night we received extended information about the Coronavirus Job Retention Scheme, which we informed you about here. Here are some of the key updates that employers need to know. However, this is a fast-moving situation, so it is important that you digest the full guidance published here.

  • The scheme is running for 3 months from March 2020, and the employee in question must have been on your PAYE books on or before 28 February 2020. Those hired after this date cannot be furloughed
  • The scheme is available to full time, part-time, agency and zero-hours employees. There appears to be no minimum earnings threshold applicable
  • If you agreed a period of unpaid leave with an employee before 28 February 2020 - for example, for a career break, you cannot end this and place the employee on furlough leave instead. Similarly, If you have already agreed with employees for them to work reduced hours, or for reduced pay, they will not be eligible for this scheme
  • To be eligible, an employee cannot continue to undertake any work, provide services, or generate any income for the company
  • If an administrator has been appointed meaning he company is under the management of the Administrator they will be able to access the Job Retention Scheme
  • Employers can claim 80 percent of monthly wage costs subject to a cap of £2,500 a month. In addition to this, you can claim the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions as part of the grant
  • For employees with variable earnings who have been employed for at least twelve months, employers can claim the higher of the same months earning from the previous year or their average monthly earnings for the 2019-2020 tax year
  • If an employee has less than twelve months service you can claim for an average of their monthly earnings since they started work. Where employees have very short service and started in February 2020 you need to take a proration of their earnings to date
  • The employee’s reduced wage will be subject to Tax and National Insurance as usual, but you are not required to ensure the employee is earning at least the National Minimum Wage or the Living Wage whilst on furlough. So, the 80 percent of salary can take them below these thresholds
  • If employees are obligated to undertake remote/distance learning during furlough leave they must be paid at least the National Minimum Wage or the Living Wage for this 
  • If employees have  a secondary employer they can receive furlough payments from both employers
  • If you receive public funds for employment costs you are expected to use these to continue to cover the costs of employees and not place them on furlough
  • You can submit one claim every three weeks and the minimum period an employee can be placed on furlough for is 3 weeks
  • Employees who are furloughed retain all employment terms, including the right not to be unfairly dismissed
  • Employees undertaking a statutory form of leave, for example, maternity or adoption leave will continue on this leave. However, when they return to work you can place them on furlough if their role would have been furloughed and the scheme remains open
  • Employees accrue leave as usual whilst on furlough and retain all contractual benefits, for example, their company car, health insurance etc
  • Importantly, placing an employee on furlough leave must be agreed between employee and employer. Lay off or redundancy is an entirely different process

JCP’s HR team is receiving a lot of enquiries with questions for tailored support. To help streamline this service for businesses we have put together the following package to help employers receive comprehensive and cost-effective advice. This package includes:-

  • A review of all your employment contracts
  • The recommended letter to seek permission
  • The letter of notification
  • Selection matrix if required
  • A process flow that deals with pooling and selection
  • An hour of advice with an HR Advisor

For more information call our Employment and HR team today on 01792 773 773, email employment@jcpsolicitors.co.uk, or use our Live Chat facility.

To keep up to date with the latest news from JCP Solicitors, including COVID-19 developments relevant to you and your business, please sign up to our mailing list here.

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