Job Retention Scheme: Advice for Employers
Also see more updated version - Furlouged Worker Update
Employers can claim a grant of up to 80% of each employee's (who are designated as a “furlough worker”) wage for all employment costs, up to a cap of £2,500 per month.
The employee remains employed and their employer can choose to fund the difference between this payment and their usual salary, but it is not compulsory.
What is important is that employers can now identify those “furloughed workers” and have a conversation with the identified workers as part of a consultation. It is also advisable to issue these workers with a written notice.
We have now put together a list of most asked questions by our clients over the last few days and hopefully you will find these useful:
- When does the Coronavirus Job Retention scheme start from?
- How long with the scheme continue?
- Who is entitled to join the scheme?
- Is the scheme a loan or a grant?
- Can the “furloughed worker” do some tasks like admin?
- How does this impact on PAYE/Pension and other benefits
- What about annual leave? Will it continue to accrue?
The scheme should not interrupt an employees' continuity of service but changing the status of employees remains subject to existing employment law and may be subject to negotiation.
There are of course many practical questions that remain unanswered and we will address these as we receive more guidance. We are expecting updates from HMRC during the next week. As usual, Myers Clark will update you as we hear more.
If we are operating your payroll on your behalf, please rest assured we will help you set up the HMRC portal once we receive further guidance.
You need to think about whether your team needs to be reduced in numbers due to lack of work. If you are expecting to make some of your team “furloughed worker”, please start a conversation now. It is also advisable to issue a written notice (for a sample please see below).
Please note this is not the start of a redundancy process and this needs to be re-iterated to all the employees. Your way of selecting the “furloughed worker” must be logical and over the coming days and weeks it may have an impact on the morale of the remainder of the team.
Please call us and speak to your normal relationship director/manager if you would like to discuss any of the above or any other matter. We are here to help you through these tough times.
Above all - Stay Safe.
This is a sample of communication but needs to be checked out by your HR team or Employment Lawyer:
Dear [Employee name],
NI NUMBER AND / OR PAYROLL NUMBER
The purpose of this letter is to formally notify you that your position as [INSERT] on the [XXX DEPARTMENT] is being closed temporarily due to the downturn in business as a result of the COVID-19 Pandemic.
Your last official day of work will be [INSERT DAY]. Your salary will continue at their current level (IF APPLICABLE) during the Furlough period. Please understand this action in no way reflects dissatisfaction with your job performance.
The length of this furlough is [insert future date or unknown currently].
We will provide regular information as the current Pandemic unfolds and when we return to normal working routines.
A Furlough is a short-term paid temporary leave of absence at 80% [AS APPLICABLE] of current salary. The furlough period and provisions may be changed or terminated at the sole discretion of the Company, and does not create any employment contract, express or implied.
Thank you for your contributions to the business and if I can help in any way, please contact me.