Furloughed Workers

Guest Blog: HR Process for Furloughing Staff

Victoria Scally News

Employers!

Are you planning on applying for the 80% salary funding to continue paying your staff?

Do you need help and advice on how to furlough staff during COVID-19, ensuring your employees are treated fairly and in line with their employment contracts?

OR…..

Business in lockdown? Struggling to work out how you can continue to pay your staff?

Understand your options as an employer and the government support available….

Rebecca Beard from Peas in a Pod Consulting breaks down some of the big questions:

 

What is the Coronavirus Job Retention Scheme?

Put in place to support employers through this time.

Employers can continue to pay employees that would otherwise be made redundant or put on an unpaid period of lay-off.

It is open to all employers with a PAYE scheme, including public-sector employers and charities.

How does the scheme work?

Under the scheme, if an employee is designated as a “furloughed worker”, a grant is available from HMRC to reimburse the employer for 80% of the wage costs relating to the worker.

This is capped at a maximum of £2,500 per month.

Payments can be backdated to 1 March 2020. 

What process do I follow to ‘furlough’ an employee?

Unless the employer has a contractual right to lay off workers, they will need to obtain the worker’s agreement to be placed on furlough leave.

In most situations we would not expect this to be an issue, if the worker is aware that the alternatives are redundancy or a period without pay.

Firstly:

You should ensure that, as a result of this global outbreak, there will be no work at all for the identified employee to carry out whilst furloughed.

This is straight forward if your business has been forced to temporarily cease trading. This may be less clear if you are continuing to trade but business has reduced.

In this situation, negotiating and agreeing a temporary change of the terms to reduce the employees working hours and pay may be a more fitting option. Make sure you follow a fair process if you do this!

Secondly:

Have a conversation with the affected employee, explaining that you are planning to “furlough” them as a way of avoiding a redundancy scenario, on either full pay or pay reduced by 20% (your choice), as you cannot continue to provide them with any further work as a result of the global outbreak.

The result is (with their agreement) designating them as a “furloughed worker”, enabling you to continue to pay them through funding from the Government’s Coronavirus Job Retention Scheme.

Finally:

Send each employee confirmation of the conversation or agreement to verify their terms and conditions temporarily in writing.

Peas In A Pod can help you with drafting letters for this.

Along with recent pay information for each employee, you should then be ready to submit onto the new online HMRC portal when it opens to apply for the funding. 

…or at least until the next government update is released!

Can the employee undertake work whilst ‘furloughed?’

The worker should not perform any work for the employer while on “furlough leave”.

We expect there to be anti-fraud measures put in place to ensure this scheme is not abused or exploited by employers and it is likely that heavy penalties would apply.

Got further questions about specific circumstances or ongoing situations and wondering how this will apply? Tune into my Q&A session with Mr Heelan later this week, where the whole landscape may have completely changed again!

Advice correct as of 25th March 2020.

About the author

Becki From Peas In A Pod Consulting

 

Rebecca Beard

HR Consultant

Peas in A Pod Consulting