Further to the video we published this morning, there is now additional guidance from the government regarding Furlough Leave. This is a fast changing situation and we naturally want to bring you the latest news as we get it…
The Government has now released further guidance on Furlough leave – www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Nicky Gleadow of the HR Point has summarised the key points here:
- Open to all employers who had a PAYE payroll scheme at 28 February 2020
- Can cover businesses, charities, recruitment agencies and public sector (although where possible public sector workers should be redeployed to assist with the corona virus response).
- Covers full-time, part-time, agency contracts and employees on flexible hours and zero hours contracts
- Employees have to have been on your payroll on 28 February 2020 – if you made then redundant since then and rehired them they are eligible still
- Employees can not work for you while furloughed
- The minimum period of furlough leave is 3 weeks and the grant can only be claimed once every 3 weeks even if you pay weekly
- Employees will still have tax and National Insurance deducted from the payment made to them
- Employers can claim 80% (capped at £2,500) plus associated Employers National Insurance Contributions and minimum pension auto enrolment costs
- Employers can top up to 80% and pay higher pension contributions but these will not be covered by the grant
- Pay is calculated as:
- For those with 12 months employment the higher of the same month’s earnings the previous year or average monthly earnings from the 2019-20 tax year
- For those with less than 12 months employment – average of monthly earnings since they started work
- DOES NOT include commission, bonus or fees.
- Can go below National Minimum Wage or National Living Wage as they do not apply as the employees are not working – but if they do any training while off that time must be paid at NMW/NLW
- Employees on statutory sick pay or self-isolating can be furloughed after that
- Employees shielding (those at high risk) can be furloughed
- Employees with more than one job can be furloughed from each job separately and each employer deals with their own claim
- Employees on Furlough can do volunteer work or training as long as it does not provide services to generate you revenue
- Employees on maternity leave / adoption / paternity / shared parental leave can stay on that – BUT if you pay enhanced payments these are covered and can be claimed under the scheme
- Payments received into the business must be included as income in the accounts.
- No fees can be charged to employees the full grant for the gross pay must be paid to the employee (subject to tax and NI deductions)
- The scheme is running for 3 months from 1 March
- All employment rights continue during furlough
- Employees have to be notified in writing and you should keep a copy
The HR Point have a furlough leave agreement document available. If you are an MIA member and would like a copy of this, or any other guidance, please contact email@example.com or call 01903 783584.