Financial support for furloughed workers
Financial support for furloughed workers will be provided to employers through the ‘Coronavirus Job Retention Scheme’.
This scheme is available to employers who use PAYE payroll from 28 February 2020. This may include:
- those who do casual work
- those who have zero-hours contracts
To be eligible for the scheme, employers will need to:
- select and tell (‘designate’) the employees affected that they’re furloughed
- keep employees on the employer’s payroll
- make sure furloughs last at least 3 weeks
If someone was made redundant on or after 28 February 2020
An employer can decide to rehire them and put them on furlough.
If someone has more than one job
Each job is treated separately. This means they may be able to either:
- continue to work for their other job
- be furloughed for both jobs
If they’re furloughed for both jobs, they’ll be eligible for financial support for each job.
Selecting and telling affected employees
Employers must select employees for furlough in a fair way to avoid any discrimination.
They need to also get agreement from the employee to do this, unless it’s covered by a clause in the employment contract.
If an employee disagrees with their employer’s decision, they’ll need to talk to their employer and try to come to an agreement.
Any furlough agreements should be in writing. It’s a good idea to include:
- the date furlough starts
- when it will be reviewed
- how to keep in contact during furlough
HMRC (HM Revenue & Customs) will reimburse 80% of furloughed workers’ wage costs to employers, up to a maximum of £2,500 per month.
Payments will be made every 3 weeks. This is because 3 weeks is the shortest period a furlough can last.
Employers will be able to make a claim for the money once HMRC’s new system is available. Claims can be backdated to 1 March 2020.
It’s up to employers whether they pay the remaining 20% of wages. They do not have to pay it.
If employers need short-term cash flow support, they may be eligible for a ‘Coronavirus Business Interruption Loan’.
Lay-offs and short-time working
In some situations, an employer might need to close their business for a short time or ask staff to reduce their contracted hours.
If the employer thinks they’ll need to do this, it’s important to talk with staff as early as possible and throughout the closure.
Unless it says in the contract or is agreed otherwise, they
still need to pay their employees for this time.
Employees who are laid off and are not entitled to their usual pay might be entitled to a ‘statutory guarantee payment’ of up to £29 a day from their employer.
This is limited to a maximum of 5 days in any period of 3 months. On days when a guarantee payment is not payable, employees might be able to claim Jobseeker’s Allowance from Jobcentre Plus.
Using holiday for a temporary workplace closure
Employers have the right to tell employees and workers when to take holiday if they need to.
An employer could, for example, shut for a week and tell everyone to use their holiday entitlement.