Most small business owners will by now be aware of the Government’s emergency measures to save jobs during the Coronavirus crisis. This comes in the form of the Job Retention Scheme. But what does it mean, who qualifies and what do we need to do?
So, what does it mean?
You’ll have heard the term ‘Furlough Leave’ recently, it’s an established term for a leave of absence. But, in this context it also means that the Government will pay up to 80% of salaries if you retain your employees on payroll, even though they are not working. Because they will remain employed and on payroll means that it is different to being laid off or made redundant. The aim is that once the current crisis is over, we can return to business as usual and therefore your employees can return to work.
And who qualifies under this scheme?
This applies to any UK business who can not afford to pay their staff due to a downturn in work or having to close under Government guidance which is a direct result of the Coronavirus Crisis only. It is offered as a stop gap in order to retain jobs and limit the requirement for lay-offs or redundancies. These payments have been confirmed by the Government as grants and not loans, this means they will not need to be repaid.
The Job Retention Scheme only covers PAYE employees – depending on your set up, this may include zero hours and agency workers.
OK, so what do we need to do?
Due to the speed at which this has been set up, some of the details are pending, but we do know that there will be an online portal for you to provide details of those employees to be furloughed, you’ll need to submit payroll information and possibly some further details.
Until we hear otherwise, we would recommend taking the following approach in order to be successful:
- Select which employees need to be furloughed
- The Government will pay 80% of salary (up to £2,500 per month), you will need to decide whether to top up the remaining 20%
- Talk to your team, explain your situation, gain consent and written agreement for furlough from those employees – employees MUST agree to this, if they don’t, you will have to look at redundancy instead
- If they are currently still working, this must stop immediately. The Scheme does not allow for staff to undertake ANY work.
- To qualify you must be on furlough for a minimum of three weeks.
- NOTE: You can NOT mix short-time working (reduced hours) and furlough and you MAY NOT switch between the two.
The details around the exact approach is still to come, up-to-date information and details of accessing the portal (when it’s available) can be found here.
If you are unsure if an employee should qualify or you experience difficulty managing this process, please seek professional support before continuing.
Is there a timeline?
Employees must have been on your payroll (PAYE) on 19 March 2020 to qualify. The current term for the scheme is until end of June 2020 and will be back-dated to 1 March 2020. The Government has stated that the Scheme will be extended if necessary.
Get in touch if you need further advice or support.
Stay home. Stay safe.