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Coronavirus Job Retention Scheme and Furlough Leave

March 24, 2020 by JSO

Coronavirus Job Retention Scheme & Furlough Leave

 

Just an update on the Job Retention Scheme and Furlough Leave which is developing through the course of this challenging time and will hopefully be available shortly.

Again all the latest information is available from the link below for employers:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

As it stands, this is what we currently know about this scheme and we will of course update you all as and when new information becomes available.

Who is Eligible?

It is available to all UK businesses with a PAYE scheme including public sector, local authorities and charities, regardless of the size of the company.

How can the scheme be accessed?

  • You will need to designate all affected employees (those that would otherwise have been made redundant) as ‘furloughed workers’. This means that these workers cannot undertake any work for the employer that has furloughed them, however they will remain employed by the company.

 

  • All employees should be notified if they have been marked as furlough and agreement by the employee may be required.

 

 

  • It is important to note that the ability to apply for the scheme remains subject to existing employment laws and employee contracts. An employer can place employees on furlough leave if employee contracts contain a layoff or short term clause. If there is no clause in place, agreement from the employee will be required. Just Simply Organised can help with this.

 

  • HMRC must be notified of all employees that have been furloughed and their earnings. This will be done via an online portal. The portal is currently not live but we will be notified when this can be accessed.

 

  • HMRC will reimburse 80% of employees wage costs up to a cap of £2,500 per worker per month. Those employees on zero hours contracts can use monthly pay in February as a benchmark.

 

  • These employment costs will be backdated to 1st March 2020, running for 3 months, how this will be worked out will clarified at a later date.

 

  • The employer may choose to top-up the remaining 20% of the employees salary if they feel they are able to. If the employer cannot top the remaining 20% up the employees wage slip will shop a 20% deduction in wages. This is where it is prudent to check contracts and gain agreement from the employee as 20% reduction in their salary is a change in the terms and conditions of their employment.

 

It is uncertain when this scheme will be fully operational and therefore when employers will be reimbursed although government information has stated that it hopes to get some services running in a number of weeks. That said the government has directed businesses to seek help from a short term business loan to support cash flow in the interim or deferring VAT and income tax payments. This information can be found from the government link within this blog.

Please be assured that as soon as more information comes to light we will update you all and hopefully provide some clarity on the situation.  Please email lyn@justsimplyorganised.co.uk with any queries as we are working from home so cannot take any calls.

Stay safe and our best wishes to you all.

 

 

All content provided in this blog is for information purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.

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