Coronavirus advice for employers – Commonly asked questions
The rapid spread of coronavirus has resulted in many employers faced with the challenging question of how to keep their business afloat whilst their workload and income may have reduced significantly or ceased altogether.
Many businesses will have had to take the step of furloughing some or all of their workforce via the government’s coronavirus Job Retention Scheme. The scheme will enable many employers to keep going whilst their employees will receive 80% of their income up to a monthly cap of £2,500.
As with many matters relating to employment law, there are several variables at play. The fact that this situation is unprecedented is also resulting in some confusion. We have taken some of the questions we have been asked most frequently and compiled these with answers.
Who is eligible?
The Coronavirus Job Retention Scheme (CJRS) is available to employers who operated a PAYE scheme on or before 28 February 2020. Employees covered by the scheme are those who were employed on or before 28 February 2020 and include contracted full and part time employees, workers and those on flexible or zero-hours contracts.
Employees made redundant on or after 28 February 2020 are also eligible for the scheme, although the employer would need to rehire them and put them on furlough.
Employees who resigned on or after 28 February 2020 (perhaps to start a new job that no longer exists) may ask to be rehired and put on furlough. Although there is no obligation on the former employer to do this, the scheme does allow for this situation.
How does the scheme work in practice?
Whilst your employment contracts may allow you to make reasonable changes to the terms and conditions of employment, it is best advice to seek permission and agreement before making any changes. You may have a short time working and/or layoff clause in the contract, however, the legislation relating to this is different to the current unprecedented situation.
Our advice is to seek permission from each employee to put them on ‘furlough’. Once an agreement has been reached, this must be confirmed in writing to the employee and records of anyone who is furloughed must be kept for 5 years. An HR management system such as breatheHR can help with this. We are an accredited partner of breatheHR so please contact us for more information.
Claims can be made to the government scheme for an 80% reimbursement of wage costs for furloughed workers. At the time of writing this scheme is still in the process of being set up, therefore, at the outset, employers will be required to pay wages and claim these back once the scheme is active.
What happens if an employee is on sick leave or ‘shielding’?
You cannot claim under the CJRS for employees while they are getting Statutory Sick Pay, but they can be furloughed and claimed for once they are no longer ill or receiving Statutory Sick Pay.
You can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.
What happens if I have apprentices?
Apprentices are eligible to be placed on furlough. Apprentices should be encouraged to continue their training and can continue to do so whilst on furlough so long as this does not lead to the business being able to generate revenue.
What happens if someone is on maternity, adoption or shared parental leave?
The normal rules for family leave and pay still apply. Employees on family leave are not automatically entitled to go on furlough. In theory, it is possible for an employee on maternity leave to return to work early by agreement, to then be furloughed.
If someone was due to return to work from family leave prior to the end of a period of furlough, they would be placed on furlough once they were available for work.
How much can the organisation claim if they have staff on variable hours or earning commission?
If a member of staff’s pay is variable, or if their pay is partly made up of commission, the 80% reclaimable under CJRS should be calculated by taking the higher amount of either:
- The same month’s earning in the previous year
- The average monthly earnings from the 2019-20 tax year
If the employee has been with the company for less than 12 months, the calculation should be based on average earnings since the start of their employment.
You can also claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, any discretionary payments of bonus or commission should be excluded.
How do I select which staff to furlough if there is still work to do?
There are several factors to consider here and this decision should be carefully considered by employers. Those employees that continue to work should be able to complete all the tasks that need to be done to keep the business operating. It is worth noting that employees should also be capable of completing their usual workload; where employees are having to undertake schooling or childcare for their children due to school/nursery closures, it may be sensible to consult with these staff about going onto furlough.
The decision to furlough should be fair and not discriminatory.
Can staff carry on working whilst on furlough?
The rules around this are clear; those workers who are put on furlough are not able to undertake any work for the length of time the furlough applies. Employers are, however, able to ask employees to complete training whilst furloughed.
It has now been clarified that employees can start a new job whilst on furlough, if their contract of employment allows this.
What’s the minimum furlough period?
Furloughs must last for a minimum of 3 weeks at a time. You can if you wish rotate staff by putting them on and off furlough, however, each furlough period must be no less than 3 weeks, it must be confirmed in writing and records kept for 5 years.
Whether your staff are on furlough or working from home, it is likely to be a challenging time for both employer and employee. Keeping in touch with furloughed workers and keeping them up to date via regular communication may help to alleviate some concerns and pave the way for a smoother re-integration once the business is able to either re-open or return to normal capacity.
These are just a few of the most frequently asked questions we have received in recent weeks. For more information, please contact KMC Human Resources. We are offering telephone / video consultations to new and existing clients.