25 Mar Furloughed Workers: Covid 19 Support for employers – What does it mean for your business?
What are Furloughed Workers?
Furlough is a process supported by the government to avoid lay off and redundancies of staff and furloughed workers are your employees that fall into this category. It was announced on 20th March 2020 in the Prime Ministers update as part of the Government support to businesses during the Covid-19 Pandemic.
This system is due to be in place for three months from 1st March 2020 however, may be extended.
What can I access?
The current guidelines for Coronavirus Job Retention Scheme detail that:
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. The employer can make up the further 20% – this should be confirmed to the employee both in the furlough meeting and in writing.
- All UK businesses are eligible for the Coronavirus Job Retention Scheme.
How can I access the scheme of furlough?
To access the scheme, you will need to designate affected employees as ‘furloughed’ workers and notify employees of this change.
You then need to submit information to HMRC about your employee and their new earnings through an online portal. (This has yet to be set up, and HMRC are working on a system for reimbursement, but we will keep you updated!)
Development of Furlough:
- As furlough is a process that has not been regularly reviewed in law, we advise that the process is run similarly to Consultation and collective agreements to allow agreed changes in terms and conditions of employment.
- Fulough can only be used as part of the Coronavirus Job retention scheme for those employees that would otherwise have been laid off during the crisis – it is not for self-isolation payment
Other information to be aware of:
Furlough and the Coronavirus Job Retention Scheme are evolving processes, and therefore Altum HR will continue to keep you abreast of any further developments over the coming weeks and months.
Furloughed workers will remain employed while furloughed. You may fund the difference between the furlough payment and their normal salary, but you do not have to.
If your employee’s salary is reduced as a result of the change, and they are facing financial hardship, you could encourage them to see if they are eligible for support through the welfare system.
As with all employment processes, there are risks.
Although we are going through unprecedented times it is essential to remember that changing the status of employees remains subject to existing employment law, therefore, as a contractual change, the employee has the right to be consulted. Failure to consult may result in successful claims relating to breach of contract.
Where Consultation is not completed the act of furlough could be deemed as a unilateral change to employment contracts and therefore, a breach of contract that could result in wrongful/unfair dismissal.
We also know that it can be daunting if you have no HR support and have to deal with this yourself.
Let us support you. At Altum HR we have been working hard to put together a range of free and paid services to help any business during this uncertain time.
We are offering a FREE consultation where you can get in touch to discuss your business and your current situation. We can then advise you on the best course of action and let you know what support we can provide. No obligations, no strings – we want to help.
To book your free consultation with one of our highly qualified expert HR professionals, please get in touch here. We look forward to supporting you.