Furlough Leave – update and what we now know that we didn’t a few days ago
*We intend to keep this page up to date with the latest developments on Furlough leave, please bookmark it and check back regularly.
***Update Thursday 9th April 8.30am ***
Despite much speculation that it could take as long as until late June, HMRC has announced that it will bring the Job Retention Scheme Portal, for Employer Claims, on stream by 20th April. The portal will need to be robust to cope with what is almost certainly going to be extremely heavy demand. Employers who have or are to ‘Furlough’ any employees, will need to claim through the portal and the sooner they register and enter the necessary information (see previous Q&A article) the better chance they will have to see the grants coming through and easing their cash-flow.
*** Update Friday 3rd April – 4pm ***
Furlough – An Employers’ Toolkit
We have developed a toolkit of documents for employers considering or facing furloughing in their workforce. This toolkit contains notices, furlough agreement, FAQs and policy documents to cover all that an employer will need to ensure a compliant furlough programme. Let us know if you would like to receive the toolkit. We have also heavily discounted our fees for any advice and support work employers need to get them through this process. Please contact Anne Mannix or Fudia Smartt in our employment team for more information.
***Update Thursday 26th March 4pm ***
1. Furloughed Employees must be furloughed for at least 3 weeks as a minimum.
2. Employers’ National Insurance contributions on the Furlough Pay can be recouped by a grant.
3. Employees engaged after 1st March 2020 are excluded from the Furlough Scheme.
To avoid fraud, there are expected to be cross-checks between the applications for grants against PAYE records for each employer.
Employers will be required to make one claim for the entire workforce, record how many workers are covered and will need to keep records.
The employees remain on the payroll deducting tax and national insurance under the pay as you earn (PAYE) system. NOTE it is still not clear if the employer’s NIC is subsumed in the Furlough Pay but if PAYE is to be operated as ‘normal’ it suggests that employers will continue to need to pay their NIC element.
If employers want to top up pay levels, they can, but will not be able to claim for more than 80 per cent of £3,125.
The employer must submit information to HMRC about the employees that have been furloughed and their earnings. The submission will be through a new online portal which is expected before the end April.
If an employee’s salary is reduced as a result of these changes, the employee may be eligible for support through the welfare system, including Universal Credit.
For employees on zero-hour contracts, the employer can benchmark the Furlough Pay to the monthly pay in February 2020.
If any zero-hour employee did not work in February, they should claim Universal Credit.
If employees have to stay at home to look after young children, the employer is likely to be allowed to claim compensation if they furlough these workers.
The Coronavirus Job Retention Scheme will operate for at least 3 months from 1 March 2020 but will be extended if necessary.