Coronavirus Job Retention Scheme - further details 8th April 2020
Posted on: 8th Apr 2020 by: Demos HR Solutions
Our latest blog provides further updates to employer guidance on Coronavirus support. The Government is regularly issuing additional information and clarification, and we have summarised the latest points below:
Former workers who left their employment on or after 28 February 2020 for redundancy or another reason, including resignation, and who cannot be furloughed by a new employer can be re-hired, placed on furlough and a claim made for their wages. Employers are not obliged to rehire those staff.
Employees can only be furloughed after their period of sick leave and are no longer receiving SSP.
These are employees who are shielding or who need to stay at home with someone who is shielding. They can be furloughed if they are unable to work from home and the employer would ‘otherwise make them redundant’ which whilst unclear could simply mean without any work to do at home. This is explained more in the updated guidance details linked below.
Caring responsibilities including children off school
Those employees who have caring responsibilities as a result of the pandemic, such as caring for children unable to attend school, can be furloughed whether there is work for them or not.
What is included in pay?
A claim for pay includes regular pay which is due under the contract which may include overtime and contractual commission. It cannot however include discretionary bonuses, non-cash benefits or discretionary commission.
Employees with more than one job
If an employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.
Fixed term contracts
Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term employee’s contract ends because it is not extended or renewed you will no longer be able claim grant for them.
Volunteer work and training
A furloughed employee can take part in volunteer work, if the work does not provide services to or generate revenue for, or on behalf of your organisation.
Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation.
Where training is undertaken by furloughed employees they are entitled to be paid at least their appropriate national minimum wage for this time.
To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.
Employer National Insurance and Pension Contributions
You’ll still need to pay employer National Insurance and Pension Contributions on behalf of your furloughed employees, and you can claim for these too.
You cannot claim for:
- additional National Insurance or Pension Contributions you make because you chose to top up your employee’s salary
- any pension contributions you make that are above the mandatory employer contribution.
Benefits in Kind and Salary Sacrifice Schemes
The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary.
Apprenticeship Levy and Student Loans
Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.
Rotating workers on and off furlough
Furlough can be rotational and there is no limit on the number of times a worker can be furloughed. However, each furlough leave period should be a minimum of 3 weeks.
When your employees are on furlough you cannot ask your employee to do any work that:
- makes money for your organisation
- provides services for your organisation
They can take part in volunteer work or training.
Employees still have the same rights at work, including:
- Statutory Sick Pay
- maternity and other parental rights
- rights against unfair dismissal
- redundancy payment.
Disappointingly, given the upcoming Easter and May bank holidays, the issue of whether annual leave may be taken during a period of furlough is not addressed in the Updated Guidance. Current ACAS guidance is ambiguous in that it could be interpreted as stating that furlough and holiday can be concurrent and holiday does not break the furlough which may offer some comfort to employers concerned at accrual of significant holiday entitlements during a longer furlough period.
However, given that the Guidance itself does not address the point, employers will be wary of potentially breaking the minimum period by allowing or imposing any annual leave. For the time being, it may be prudent for employers to make clear to workers that no holiday is to be taken during furlough – e.g. bank holidays will be effectively added to accrued entitlement on return from furlough.
If there are any further updates before this long bank holiday weekend we will be sure to get in touch again, however if not, whilst it's going to be a strange Easter weekend on lockdown, we hope you and your staff are able to enjoy time spent with your families.
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