March 24, 2020
Furlough Leave, a phrase which you have possibly never heard of but has an increased significance to both employers and employees. So, what do we know about it so far?
Apart from the announcement by the Chancellor, at the minute very little is known about how the new “Coronavirus Retention Scheme” or “Furlough Leave”, as it is commonly called, will work.
In general terms, regardless of what your business does or how big it is, all UK employers can claim 80% of the employees’ wages up to a maximum of £2,500 for those who are not working but kept on the payroll. Employers can choose to top up the remaining 20% if they wish. The scheme is to be backdated to 1 March 2020 and will be open for a minimum of 3 months. No written advice has been given by the Government, though the following websites are being regularly updated:
As an Employer what should you do?
The first stage is to decide which employees you need to put on furlough leave and explain to them why you are doing this. An initial conversation should be followed up in writing stating what you have decided with a review date when the situation will be looked at once more.
It is important to bear in mind that most employment contracts do not permit an Employer to change an Employees salary, potentially provide them with no work and change their employment status without agreement. In the current circumstances it is probably the case that most employees will have no objection.
All information should then be submitted through the new HMRC online portal. Further information regarding this will be set out by HMRC
It is important that the Furloughed employees then stop working.
The Government has left it at the Employers discretion as to whether they top up the additional 20% of salary. Employers should bear in mind if they do not, this is a breach of contract which could lead to an unlawful deduction from wages claim.
If you require specific advice for your business at this time, we would be delighted to help and can offer our advice over a 45 minute telephone appointment for £125 plus VAT (£150.00). Please contact us on 01452 222340 or firstname.lastname@example.org to book an initial a telephone consultation.