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Laura Bowyer

What Does Furlough Mean?

Here’s some clarity, a new UK term in HR and Employment Law, known as employees on a leave of absence.

  • The Coronavirus Job Retention Scheme (CJRS) is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020, which is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).

  • Some of the main aspects of the government guidance on Furlough includes:

  • Full time and Part time employees actual salary before tax as of 28 February 2020 will be used to calculate 80% - fees, commission and bonus is not included.

  • The grant is to cover LOWER of the 80% or £2,500 per month of the employees regular wage, plus NI and minimum auto enrolment pension contributions (fees, commission and bonus not included). More guidance will be provided on NI & Pension Contributions before the scheme goes live.

  • The employer to obtain written consent from the employee. **HELP see below.

  • Employer is liable for NI & Pension for furlough employees.

  • Casual workers or zero hour contracts are not covered unless they work on the PAYE system. • Only 1 claim can be made every 3 weeks (which is the minimum period).

  • HMRC portal will be operational at the end of April 2020. • HMRC will make payment by BACS.

  • It covers employees made redundant since 28 February 2020.

  • Employees hired after 28 February 2020 cannot be furloughed under the scheme.

  • Holiday will continue to accrue during furlough, employers can request holiday taken during furlough giving the appropriate notice ie, 2 weeks notice by employer for employee to take 1 weeks holiday. The new Working Time (Coronavirus) (Amendment) Regulations 2020 (WTR) amends the WTR1998 to relax the restriction on carrying over untaken annual leave into the next leave year not been taken because of the COVID-19 pandemic ie, if the employee has been unwell or working significantly hard. The untaken leave can be carried over into the next two leave years. The new rule applies to the four weeks of annual leave provided for by Reg 13 WTR.

  • Employees on unpaid leave after 28 February 2020 will be covered.

  • Employees on SSP/Self Isolate can be furloughed after their return.

  • During furlough, they can volunteer as long as it does not provide service to generate revenue for and on behalf of your business.

  • If the worker completes online training for the business during furlough and it is not used by the employer to generate revenue as a way of circumventing furlough leave, they are to be paid at least NMW/NLW for the time spent training even if it is more than 80%, wage is subsidised.

  • Employers have already placed employees temporarily onto reduced hours and pay due to the downturn in work as a result of the pandemic. The employer will not be able to seek reimbursement in respect of wages costs for employees who are still working on reduced hours.

We can provide you with a COVID-19 Package which includes Consultation Criteria, Draft Furlough Letter

& Agreement for a minimal fee.

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