Furlough Advice for Employers
The COVID-19 pandemic and subsequent lockdown put a lot of businesses in the tough spot of having to furlough employees through the Coronavirus Job Retention Scheme launched by the UK government. We’re here to provide you with all the support and guidance you as an employee will need to get you through the next few months ahead.
Feel free to contact us if you need help with any aspect of the furlough process.
How to furlough employees
From 1st July 2020, you are only able to furlough the same number of employees who were furloughed between 1st March 2020 and 30th June 2020. However, from 1st July you may change the arrangement with your employees regarding the terms of their furlough. You can now flexibly furlough staff – meaning that they can resume their work on a part time basis and you can claim the furlough grant for the hours they’re not working.
Before furloughing employees or changing the terms of the arrangement, you should communicate clearly with the individuals to ensure they are in agreement and fully understand what is expected of them during the furlough period. To be eligible for the furlough grant, this should be done in writing.
Once this agreement has been reached between you and your employee, you will need to calculate how much you are eligible to claim as part of the furlough grant. We advise that you take your time make these calculations as HMRC may decide to audit your claim and deny your application if they find any inaccuracies. If you’re not overly familiar with employment law, we recommend contacting a HR & Employment specialist to assist you with this process.
These claims can then be submitted through the HMRC using the Government Gateway user details you use for PAYE online.
Who is eligible for the UK Coronavirus Job Retention Scheme?
As an employer, you are eligible to apply for the UK Coronavirus Job Retention Scheme and receive the furlough grant to support your employee’s wages if you
- Had employees on furlough for at least 3 consecutive weeks between 1st March 2020 and 30th June 2020 – note that you cannot claim for any more employees from July 2020 than you claimed for before the end of June.
- Have a UK PAYE Scheme that was started before 19th March 2020 and are enrolled for PAYE online
- Have a UK bank account
- Submitted a report in the RTI reporting system for the employee being claimed for before 19th March 2020
What does it mean to be furloughed
As of 1st July 2020, employees can be flexibly furloughed – allowing them to work part time for your business but still be considered on furlough (and therefore eligible for the grant) during any hours when they are not working during normal operating hours. Regardless of whether employees are furloughed full-time or part-time, the following rules apply.
Furloughed employees cannot:
- Carry out work that makes money for your business or any organisations linked to/associated with your business
- Carry out work that provides your business or linked and associated organisations with a service
Furloughed employees can:
- Take part in training that will assist them in their role after furlough
- Volunteer for another employer or organisation
- Work for another employer (if contractually allowed)
How long can a company furlough employees?
The Coronavirus Job Retention Scheme is currently set to end on the 31st October 2020 however the employer requirements will change before this deadline. You may also bring back employees before this date on a flexible furlough scheme if you’re not yet in a position to bring them back full-time.
In August, employers will be once again accountable for national insurance and pension contributions.
From September, the government will decrease their contributions to an employees wages from 80% to 70% meaning that employers will be required to pay the remaining 10% of the furlough scheme minimum wage.
In October, the employer contributions will be required to increase to 20% with the government covering 60%.
How to bring employees back from furlough
Employers will receive a bonus of £1,000 for each furloughed employee who is still employed by the 31st January 2021 (provided they earn at least £520 per month and are not serving their notice) so the focus for many businesses is now on how to bring these employees back.
It’s important that you follow the correct process to bring your employees back from furlough – both to keep you legally compliant and to ensure you can get the best out of them after what will have been a stressful time.
Communication is again, crucial to this stage to ensure that you provide adequate notice to your employee and can help them work around other commitments they may have to consider now e.g. childcare, transport or work-from-home capabilities. We recommend having a discussion over the phone with your employee first to gain their input and then to follow up with a written notice that their furlough is coming to an end.
If you’re not yet in a position to bring furloughed employees back full-time you can utilise flexible furlough – where employees are furloughed part-time and work part-time. This allows you to continue to claim for the hours where they’re not working and also provides employees with a more gradual re-introduction to the workplace.
Bringing employees back from furlough on a part-time basis can be especially useful for employees who have been on furlough for a long time, who suffer with their mental health, or who have other commitments such as children to work around as it allows them to re-acquaint themselves with the industry, business and responsibilities of the role with a much lower risk of feeling stressed and overwhelmed.
Once your employees are back from furlough you will need to consider how you can boost morale and get them to perform at their best after an extended period of not working. If you do not already have an employee benefits system in place, it may be time to look into it as a way of demonstrating that you value them and their skills. You should also be mindful of any training they may require to get them caught up with anything they missed while on furlough.
How to handle redundancies after furlough
Unfortunately, the furlough scheme has not been enough to save all businesses during COVID-19. If you’re in a position where you now need to make your furloughed staff redundant, you should follow your normal redundancy procedure but be sure to also consider what outplacement support you can provide to your employees to make this highly challenging time easier for them.
This is not a decision you can make lightly so we encourage you to reach out for professional support to help you through this process. Contact our specialists with any queries you might have.
Call us today 0777 374 7396