To try and combat some of the issues which businesses are already facing, or may face in the future, the Government is releasing measures to be put in place to support businesses throughout this period of disruption caused by COVID-19.
The Government has announced that all UK businesses will be eligible to access the Coronavirus Job Retention Scheme, which will provide support for furloughed workers.
Whilst there are still some unknowns, daily developments and an uncertainty in how long COVID-19 is going to be impacting us, we will ensure that all guidance is up to date and in-line with the most recent communications.
What is a furloughed worker?
The government are currently describing a furloughed worker as an employee who is kept on their employers’ payroll but does not carry out any work for them.
Key facts about furloughed workers:
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month (the definition of wage costs is waiting for further guidance)
- Furloughed worker should not undertake any work whilst they are furloughed
- In some circumstances it will be backdated to 1st March 2020
- Initially proposed for 3 months, but the Government will review and maybe extend further
- Employers may fund the difference between the payment and the employees’ salary but does not have to.
How businesses can access the scheme:
- Designate affected employees as ‘furloughed workers’
- Notify your employees of this change, in line with employment law, contracts which do not contain a ‘lay-off’ clause will need to consult with the affected employees and gain their consent
- Submit information to HMRC about furloughed employees and their earnings through a new online portal (HMRC will provide details of this as soon as available)
Some businesses may be eligible for a coronavirus business interruption loan, if they are experiencing short term cash flow problems. See the government guide COVID-19: support for businesses.
HR Guidance and Support
For coronavirus articles, webinar recording and frequently asked questions visit our dedicated page, ‘Coronavirus Advice and Guidance for Employers’. HR Solutions are here to provide you with support and advice on any employment related issues; to find out more call us on 0844 324 5840 or contact us online.
This article was updated on 23 March 2020.