COVID 19 HR Support
6th April 2020
Coronavirus Job Retention Scheme FAQs
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19). Employers can claim for 80% of an employees’ usual monthly wage costs, up to £2,500 a month. The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020. Think People Consulting, a HR, learning and development consultancy based in the Linen Quarter, have shared their most Frequently Asked Questions relating to the job retention scheme with us.
What is furlough?
A – Furlough is when an employee does not attend work because they are unable to carry out their work or there is no work for them to do, but they are kept on payroll. An employee may be put on furlough only if: you and your employee both agree, or there is a layoff clause in your contract.
Are my employees eligible to be put on furlough?
A – The criteria for furlough is that the employee:
• must be of the employment status of Full Time, Part Time, Agency Worker or a zero hrs worker and have started before the 28th February 2020.
• has not been placed on unpaid leave before the 28th February 2020
• is not currently on statutory sick pay (SSP) through illness or through self-isolation. They cannot be furloughed until they have returned from illness.
• must have returned to work following being off on Maternity, Paternity, Adoption, Shared Parental Leave or Ordinary Pay Leave. If the employee is currently pregnant and due to start Maternity Leave, please contact us for more information.
• If the employee was made redundant for reasons linked to the COVID-19 crisis since the 28th February 2020, they may be rehired and then furloughed.
What do I need to do to implement furlough?
A – The process for furlough is as follows:
• Both you and the employee must agree that they should go on furlough. Once agreed, you must write to your employee confirming that they have been furloughed. This step is essential to be eligible to claim 80% of the employee’s wage from the Job Retention Scheme.
What payment is due on furlough status?
A – Payment is as follows:
• Your will get a grant to cover a payment of 80% of your employee’s usual monthly earnings, up to a maximum of £2,500 a month. You can claim for a minimum of 3 weeks. The scheme is operational from 1st March to 31st May 2020 (this may be extended).
• The 80% is a gross payment. Employers will still need to pay Income Tax, National Insurance contributions and any other deductions from the wage.
What is the 80% based on?
A – If an individual has been employed for a full year, you will be able to claim for the higher of these options:
• The amount the employee earned in the same month last year
• An average of your employee’s monthly earnings from the last year. If they have been employed for less than a year, you can claim for an average of their monthly earnings since they started their employment with you. This approach also applies if an individual’s pay varies.
Bonus, commission and fees are not included.
What happens to employee rights on furlough status?
A – Employees will have the same rights as they did previously.
Employment rights are protected during furlough, including Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
What happens to holiday leave while on furlough?
A – Employees are entitled to accrue their contractual holiday entitlement while on furlough.
Any fixed bank or public holidays can be taken at a future date.
What can employees do whilst on furlough?
A – While on furlough, employees cannot work for their employer. However, they can undertake training or volunteering, as long as it does not involve:
• Making money for their employer
• Providing services to their employer
What will happen after furlough?
A – You will have to decide if your employees are able to return to their normal duties, and if they cannot, you may have to consider termination of contracts through redundancy.
If you would like to receive Think People’s latest HR guidance relating to the Coronavirus outbreak, you can subscribe to their blog here: https://www.thinkpeople.co.uk/hr-blog/
Need more information about furlough, redundancies or other HR matters?
Think People Consulting is an award-winning provider of HR, learning and development consultancy. We provide retained and pay-as-you-go HR consultancy to help our clients comply with employment law, therefore steering clear of tribunals. We are approached to handle the more difficult aspects of HR regularly, including furlough and redundancies. If you have any questions regarding these processes, and would like to speak to somebody who has decades of experience, contact Anne on the details below for an informal chat.
From everyone at Think People Consulting, we would like to send our friends and colleagues in the Linen Quarter our best wishes during this difficult time. Stay safe!
Managing Partner at Think People Consulting,
+4428 9031 0450
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