Published 16 April 2020: The government has recently updated its furlough guidance giving answers to questions we all had in relation to the scheme, and how to ensure businesses were able to meet the very vague criteria of the initially published furlough scheme. We have added the answers to some of our commonly asked questions, now that we are in a position to provide official clarity.
This is a temporary scheme designed to help employers who have been severely affected by the COVID-19 crisis and to protect the economy. The scheme runs for 3 months from the 1st of March 2020. There are no current plans to extend the scheme beyond the 31st of May 2020 and so employers need to time this correctly, and consider what may happen if there is still no work to do at the end of this period and the scheme ceases to continue. In this situation there may be redundancies, and usual employment laws apply to this process.
Yes, provided that the employee is off for a minimum of 3 weeks for each period of furlough, and taking into account the end date for the scheme. This allows you to bring somebody back into the business to undertake essential duties for short periods of time.
As it currently stands, furlough leave must be for a minimum of 3 weeks so the employee would need to notify you of their sickness in the usual way. If they would have been too unwell to work, then this would end their furlough leave and change it to sick leave and could break the furlough leave period of 3 weeks, meaning the employer may not be eligible to receive the grant for any of that furlough leave period.
It will depend whether you permit this within your contracts of employment. The guidance says this *is* possible but HMRC may look at their earnings and there is always a possibility they won’t pay out if an employee is working elsewhere for the same hours they are on furlough leave for you, and being paid 80% of taxpayer money. This scheme is not legislated so it is down to HMRC to set their own rules and employers should bear this in mind. If the employee had another job as of the 19th March 2020 then they can be furloughed from one job, and continue to work in the other. This date was implemented to prevent fraudulent activity e.g. people hiring family members after the scheme was announced.
This is a tricky area which has not yet been clarified, and there are arguments for both cases. The concern is that holiday leave *may* break the period of furlough leave and make employers ineligible for the grant. You should take specialist advice from our HR experts on your individual situation.
Yes, and this includes apprentices. The furlough payment they receive from you must cover all the hours spent training at National Living Wage/National Minimum Wage. If this payment is not enough, then employers need to top it up to the age-appropriate rate. However, if someone is already paid NMW/NLW or close to this and you are asking them to undertake training for a significant part of their furlough leave, you are advised to seek specific advice. In addition, this may affect any furlough leave that is designated as holiday leave, if the scheme permits this in later guidance.
The guidance has changed on this point. The original guidance published on the 26th of March 2020, which we followed for advisory purposes, stated that the payment could not include bonuses, commissions or fees. It would appear the approach has been relaxed now, and the guidance now states:
“You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.”
The scheme goes on to say that any BIKs (Benefits in Kind) are not provided for on the scheme, but the employer may still be contractually obliged to pay these.
There are specific rules about salary sacrifice arrangements and how these may be managed; please take expert advice on this from one of our team.
Yes, the grant can be claimed for any of the following groups, if they are paid via PAYE:
There are some specific considerations in terms of working out and calculating the pay in each of the groups. We can provide more specific information depending on the circumstances.
There is no obligation for you to do this, but you are permitted to rehire and furlough them. The decision is a moral one and depends on whether you agree to this as the former employer. They must have been on your payroll as of the 19th March 2020. The scheme allows you to rehire those you have made redundant already, as long as they were on your payroll as of the 19th March 2020.
Company directors owe duties to their company which are set out in the Companies Act 2006. The guidance states that:
“Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.”
This also applies to companies which provide a personal service (PSC) with a sole director.
There is a slightly more stringent process to follow in this scenario, which we are happy to guide you through, as well as the calculations for furloughed pay.
Not if you want to receive the grant from HMRC. They have promised to audit this vigorously and will demand repayment of any erroneous or fraudulent claims. In addition to this, they have the right to impose fines and/or prosecute those abusing the scheme. Furloughed employees must have their furlough leave agreed in writing with you and you must keep a record of this for a fixed period of time.
We are sure there will be many more questions as time goes on and the scheme continues to evolve.
Please contact our team on 01904 655202 or email email@example.com.