The following is a summary of the updated furlough guidelines released by the government on the 10th November 2020.
The full guidelines can be accessed here
Overview
The Coronavirus Job Retention Scheme (Furlough) will now remain open until 31 March 2021.
From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month, the employer will be responsible for paying Employers NI and Pension contributions.
Employees can continue to be “flexi furloughed” working some of their contracted hours (receiving usual pay) and being furloughed for the remainder.
The government will review the scheme in January 2021.
Who can I Furlough from 1st November?
You do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020.
For periods from 1 November onwards, you can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
You can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed.
Employee / Employer do’s and don’ts
- Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.
- If an employee has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, their former employer/s should not re-employ them, put them on furlough and claim for their wages through the scheme.
- A furloughed employee can take part in volunteer work during hours which you record your employee as being on furlough as long as it is for another employer or organisation.
- Furloughed employees can engage in training during hours which you record your employee as being in furlough, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation or a linked or associated organisation. Furloughed employees should be encouraged to undertake training.
What if you have already made employees redundant?
You can continue to claim for a furloughed employee who is serving a statutory notice period, however grants cannot be used to substitute redundancy payments.
The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.
If you make an employee redundant, you should base statutory redundancy and statutory notice pay on their normal wage rather than the reduced furlough wage.
If you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough. This applies if the employee was employed and on your PAYE payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020. In this case employees will need to repay any redundancy pay and topped up notice pay (80% to 100% pay) they received.
How does Furlough work with Sick Leave?
If your employee is on sick leave or self-isolating as a result of coronavirus, they may be able to get Statutory Sick Pay (SSP). The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness.
Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.
Employers can furlough employees who are clinically extremely vulnerable, at the highest risk of severe illness from coronavirus or off on long-term sick leave. It is up to employers to decide whether to furlough these employees.
You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period.
Ending maternity leave early to be furloughed
If your employee decides to end their maternity leave early to enable them to be furloughed (with your agreement), they will need to give you at least 8 weeks’ notice of their return to work and you will not be able to furlough them until the end of the 8 weeks.
Furloughed workers and annual leave (Holiday)
Employers can require furloughed employees to take holiday, the employee is entitled to their usual contractual pay for any periods of annual leave – however the employer can “top up” furlough pay to 100% for these holiday periods.
The required notice periods are:
- double the length of the holiday if the employer wishes to require a worker to take holiday.
Workers on furlough can take holiday without disrupting their furlough. The notice requirements for their employer requiring a worker to take leave or to refuse a request for leave continue to apply. Employers should engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so.
Carrying leave (Holiday) forwards: how new legislation has changed the rules
The government has passed new emergency legislation to ensure businesses have the flexibility they need to respond to the coronavirus pandemic and to protect workers from losing their statutory holiday entitlement. These regulations enable workers to carry holiday forward where the impact of coronavirus means that it has not been reasonably practicable to take it in the leave year to which it relates.
Where it has not been reasonably practical for the worker to take some or all their holiday due to the effects of coronavirus, the untaken amount may be carried forward into the following 2 leave years. When calculating how much holiday a worker can carry forwards, employers must give workers the opportunity to take any leave that they cannot carry forward before the end of the leave year.
In order to place an employee on furlough employers need to ask the employee for their agreement. Click on the button for a template letter to communicate the need to place an employee on furlough.
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