As you will be aware, it is possible to put some or all staff into furlough if you have the appropriate right to 'lay off' staff written into their contracts, or if you can get agreement from staff to make this change. It is being seen by many companies and their employees as a way to potentially safeguard jobs for the future.
However, there were a number of unknowns around the Government's Coronavirus Job Retention Scheme which were clarified by guidance over the weekend.
This updated information may be helpful if you have already furloughed staff or are thinking of doing so in your business. Some of the key changes are as follows:
In order to reclaim the 80% salary (which will be via a HMRC portal that we hope should be ready by the end of this month), you will need a PAYE online account. If you don't already have one set up, start now - these can take about 10 days to become live. This is done through your Government Gateway account - just select 'Register PAYE' as an additional service. If you do not have a Government Gateway account you will need to register for one.
You will then be able to claim for any regular payments you are obliged to pay your employees. When working out your employees' ‘regular’ wage you CAN include basic wages, overtime, fees and compulsory commission payments. However, you CANNOT include any discretionary bonus (including tips), commission payments or non-cash payments.
Each employee must be furloughed for a minimum of three consecutive weeks. However, they can be furloughed multiple times and each separate instance must be for a minimum period of three weeks. Some employers are rotating which staff are furloughed every three weeks to spread the load out a bit more evenly.
There is also more clarity about what can or cannot be done while an employee is furloughed. Employees can take part in volunteer work, as long as it does not provide services or generate revenue to your organisation.They CAN also take part in training, such as the GAI Education Programme, as long as the training performed does not provide services or generate revenue to your organisation. However, if you are asking your employees to carry out work-related training while in furlough, they will be need to be paid at least the National Minimum Wage for those training hours. So if the calculation of the 80% furloughed wage results in an hourly rate below the National Minimum Wage, then you would need to pay the additional amount up to the National Minimum Wage. Similarly, the Government has confirmed that apprentices can continue with funded training when employers use the job retention scheme, subject to being paid at least the apprenticeship minimum wage for all the time they spend training.
Further guidance regarding these and other changes can be found on the Government's updated guidance page for employers.
We will bring you other coronavirus business support updates on a daily basis. If there is a topic that you want help with, please let us know and we will try and find the answers for you.