Last week, the Chancellor, Rishi Sunak, set out a package of measures to protect people’s jobs and incomes in response to Covid-19. A new Coronavirus Job Retention Scheme will be set up to allow all UK employers to access financial support to continue to pay salaries for those employees that would have been laid off or made redundant during this crisis.
There is limited information on how the scheme will work but from the current information we understand that an employer will need to designate affected employees as furloughed workers but changing their employment status remains subject to existing employment law. So, depending on the employment contract, may be subject to negotiation and consultation. PSHR can provide support, advice and hand holding through this process as well as providing any documentation, such as a Furloughed Worker Agreement, you will need.
Our current understanding of furloughed workers is as follows:
- The employer has to designate which employees are potentially on furlough leave.
- It is subject to existing employment law and therefore there would be a process to follow – consultation, negotiation and agreement.
- The furloughed worker would remain employed.
- The furloughed worker should not undertake work for the employer whilst they are furloughed.
- HMRC will reimburse 80% of furloughed workers pay up to a cap of £2,500 pcm.
- The employer will need to submit information to HMRC about the employees that have been designated as furloughed through a new online portal that hasn’t yet been set up.
- Employers can choose to fund the 20% difference, but they don’t have to.
- The scheme is initially open for 3 months but may be extended.
- Payments will be backdated to 1st March.
It is important to remember that any statutory payments which may be relevant (i.e. redundancy) are applicable once the furlough period has come to an end. Also, payment regarding NIC is currently unclear but there is no way of deferring pension payments; these need to be paid. In terms of annual leave, employers can dictate when employees can take holiday but have to ensure that holiday is taken within their holiday year entitlement.
When zero hours workers are furloughed, the salary payments should be calculated as per the average earnt, although there is no exact guidance at this stage.
Many of you will have employees at work, but working from home as per the guidelines, so it is important to safeguard their mental health and wellbeing. We are collating resources to help our clients with this and can be on hand to support with 1-2-1’s and developing long-term support strategies.
This week those who are considered as ‘vulnerable’ will be receiving letters from their GP with further advice during this pandemic by Sunday 29th March 2020. If this happens to any of your workforce, you will need to understand which payments these employees can access if they are no longer able to attend work. Please get in touch and talk to one of our consultants.
PSHR would like to do what we can to support you at this really challenging time.
It is business as usual for us, so call us on 01473 653000, or contact one of our consultants via email.
Emma Sheppard MCIPD