On Friday, the Government’s announced that they would pay up to 80% of staffing costs, to encourage employers to keep staff on their payroll and avert redundancies as part of the ‘Furlough’ status. The pay claim is subject to a limit of £2,500 per month per employee although it is not yet clear whether this figure is gross or net.
We have decided to put a fact sheet together with some frequently asked questions and answers. The full guidance has yet to be confirmed so we will continue to update this as and when we are aware of any further clarity and information.
It is effectively an option to lay staff off from work. Employers can claim back 80% of the employee’s salary if they are ‘furloughed’. It is not yet clear whether this will be paid to the employer or the employee directly.
No. You may have staff members or a department that needs to continue to work to keep the business running, for example a finance department. It is up to the business to decide which staff to ‘furlough’.
If you have a ‘lay off’ clause in your contract of employment, then you would have the right to ‘designate’ them as a ‘furlough’ employee.
Importantly, if there is no express ‘lay-off’ clause in the individual’s contract of employment, you would need to obtain their consent and agreement to furlough them.
If you are in a position to do so financially, then you may choose to do so, however, you do not have to.
If you choose not to pay the 20% to top up the salary, you would also need the individual’s consent to only pay them 80% of their salary on a temporary basis, as you are effectively cutting their pay
Importantly, if there is no express ‘lay-off’ clause in the individual’s contract of employment, you would need to obtain their consent and agreement to furlough them.
We understand it is initially proposed to be 3 months, backdated from 1st March 2020. However, the Government has said that it could be extended.
No, the employee is either on furlough leave or at work – there cannot be a mixed approach
In the current climate, it would be surprising for an employee to refuse to be asked not to attend work and be paid 80% of their salary (subject to the maximum £2,500) to be at home and not work. If they refused, then you could look at other options such as redundancy or asking them to take unpaid leave, which would require their agreement.
Yes, it is the employer’s decision as to who they furlough and who still needs to come to work.
Employers will need to designate affected employees as “furloughed employees”.
Once they are designated, employers need to submit information (details of the furloughed employees and their earnings) to HMRC via an online portal which has not been set up yet.
HMRC will cover up to 80% of earnings subject to a cap of £2500 (national median salary). At the moment it isn’t clear whether this is net or gross income. At present, Government guidance is that the money will be reimbursed to the employers. Therefore, you should continue to pay your employers until the funds are available from the Government retention scheme.
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Once they are designated, employers need to submit information (details of the furloughed employees and their earnings) to HMRC via an online portal which has not been set up yet.
HMRC will cover up to 80% of earnings subject to a cap of £2500 (national median salary). At the moment it isn’t clear whether this is net or gross income. It is unclear whether this is to be paid to the employer or the employee directly.
Again the finer details have not been released yet, but once staff have been designated as ‘furlough’ staff, the employer passes this information to HMRC which are told will be via an on-line portal and the payment is then made to the employee.
The idea of these payments is to protect the employee’s salary. If the payment was made to the business, there may be a risk that the money was not used to pay the employee’s salary.
No it is the business’ decision who is a ‘furlough’ employee.
It is based on the average salary.
Further clarification of this is awaited.
Read our other article we have written on COVID19 FAQs here.
Further to these FAQs, ACAS have provided some very useful guidance and advice for both employers and employees, you can find this guidance here.
The NHS has also provided some useful guidance for employees on preventing the spread and reducing their chances of being exposed. You can find that here.
If you have any further queries or concerns with regards to how your business should best manage COVID-19, then please get in touch with the HPC team today,
E: contact@highperformanceconsultancy.com
P: 0844 800 5932
Twitter: @HPC_HRservices