ACAS has provided helpful information for employers in relation to furloughing.
All non-essential premises must now close. This includes cafés, pubs, restaurants, leisure centres, cinemas, theatres, and electronics and clothing shops. This might be a difficult time for both employers and staff. It’s a good idea to make sure staff have a way to communicate with the employer and other people they work with.
The government will be introducing the ‘Coronavirus Job Retention Scheme’. This means employers can access financial support to continue paying the wages of employees who are temporarily sent home because there’s no work. These staff are called ‘furloughed’ workers.
To access the scheme, employers will need to designate relevant staff as furloughed workers. The employer needs to get agreement from the worker to do this, unless it’s covered by a clause in the employment contract.
The employer can decide who to designate as a furloughed worker. 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
A worker will stay employed while they are furloughed, but they must not work. HMRC (HM Revenue & Customs) will reimburse 80% of furloughed workers’ wage costs to employers, up to a maximum of £2,500 per month. Employers will be able to make a claim for the money once HMRC’s new system is available.
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’.