On 26 March government published further details of the Coronavirus Job Retention Scheme (Furlough Scheme) which you can read here
Below here the experts from TravLaw, operators of BETA’s Legal Hotline set out a snapshot in Q&A format of the new information to provide some clarity over the most frequently asked questions.
Furloughed Workers: All That We Know So Far…
Did the employer have a PAYE scheme in place on 28 February 2020?
If not, they will not be eligible to apply.
Can any employer apply?
If you have employees you can apply, even if you are a charity or a recruitment agency (the scheme is only available for agency employees who are not working). Public authorities are also able to apply; however the government does not expect public sector employers to use it as long as central government continues funding wage costs in the normal way.
What can the employer claim?
Employers can reclaim up to 80% of wage costs up to a cap of £2,500 per month, in addition the associated employer NIC’s and minimum auto enrolment pension contributions on that wage. If you have employees, who earn fees, commissions and bonuses, these are not included.
What happens if you have an employee whose wage varies?
In this situation the employer can claim for the higher of:
- the same month’s earning from the previous year (e.g. earnings from March 2019); or
- average monthly earnings in the 2019-20 tax year
Are employees still entitled to the National Minimum wage?
Employees are only entitled to the minimum wage for the hours they work. As a furloughed employee they will not be doing any work, therefore even if 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working. If an employee does do any work or training, they are entitled to be paid the National Minimum wage for that period.
When must the employee have been employed from to qualify for Furlough?
The employee must have been on the payroll on 28 February 2020, otherwise they are not eligible. If an employer has recently made redundant an employee who was on the payroll on 28 Feb 2020, they can be rehired and put on the scheme.
What period of time must Furlough leave be taken over?
The government scheme at present is open until the 31 May 2020, unless extended. If an employee is taking furlough leave this must be taken in minimum blocks of three weeks to be eligible for funding.
How often can employers claim?
Only once every three weeks, i.e. they cannot get weekly reimbursement. However claims can be backdated to 1 March 2020.
Can an employee of Furlough Leave do any work?
To put simply no! The employee must not be working at all. If they work for even an hour (presumably during their entire three week furlough period), they are not eligible. However, they are able to undertake training and do volunteer work, provided they do not provide services to or make any money for their employer.
What period of time must Furlough leave be taken over?
The government scheme at present is open until the 31 May 2020, unless extended. If an employee is taking furlough leave this must be taken in minimum blocks of three weeks to be eligible for funding.
How often can employers claim?
Only once every three weeks, i.e. they cannot get weekly reimbursement. However claims can be backdated to 1 March 2020.
Can an employee of Furlough Leave do any work?
To put simply no! The employee must not be working at all. If they work for even an hour (presumably during their entire three week furlough period), they are not eligible. However, they are able to undertake training and do volunteer work, provided they do not provide services to or make any money for their employer.
Can we rotate employees of Furlough leave?
You can rotate Furlough leave among employees, provided each employee is off for a period of at least three weeks. However, once an employee has been on furlough leave it is presumed that they cannot go on furlough leave again.
Could we prioritise vulnerable employees for Furlough leave?
Prioritising vulnerable workers is unlikely to be discrimination. For example prioritising the over 70s could amount to discrimination on grounds of age against those younger than 70, but this type of discrimination is almost certainly justifiable, as achieving a legitimate aim on the back of guidance from Public Health England.
What about those employees on maternity (or similar) leave?
They can continue to draw SMP (or similar) payments. The guidance does not prohibit women on maternity leave agreeing to return to work early and then being furloughed, or electing to change to shared parental leave and then being furloughed.
Could we put employees currently on sick pay or self-isolating onto the Furlough scheme?
No, they can only be furloughed afterwards once they return to work.
Can we rotate employees of Furlough leave?
You can rotate Furlough leave among employees, provided each employee is off for a period of at least three weeks. However, once an employee has been on furlough leave it is presumed that they cannot go on furlough leave again.
Could we prioritise vulnerable employees for Furlough leave?
Prioritising vulnerable workers is unlikely to be discrimination. For example prioritising the over 70s could amount to discrimination on grounds of age against those younger than 70, but this type of discrimination is almost certainly justifiable, as achieving a legitimate aim on the back of guidance from Public Health England.
What about those employees on maternity (or similar) leave?
They can continue to draw SMP (or similar) payments. The guidance does not prohibit women on maternity leave agreeing to return to work early and then being furloughed, or electing to change to shared parental leave and then being furloughed.
Could we put employees currently on sick pay or self-isolating onto the Furlough scheme?
No, they can only be furloughed afterwards once they return to work.
Help for the Self Employed – What we Know so Far
On Thursday 26 March 2020 the Government announced help for the Self-Employed whose earnings have been impacted by the Coronavirus. At this stage we only have outline details of the rescue package.
What we know so far:-
- The scheme will pay self-employed people a taxable grant worth 80% of average monthly income, capped at £2,500 per month
- The average of income over the last three years will be the basis for the calculation (subject to the cap)
- The scheme is limited to those individuals with trading profits of up to £50k. This cap whilst imposed will still cover 95% of self-employed people.
- The self-employed income support scheme will be open to those in the UK for at least 3 months. However, the scheme is unlikely to be up and running before the end of June, so it will not help with immediate cash flow issues. Self-employed will have to look elsewhere for interim finance.
- It’s different to furlough leave, where employees cannot continue to work. Self-employed people can claim these grants and continue to do business (subject to the current restrictions in place as to what businesses can open).
- The scheme is only open to those who make the majority of income from self-employment. Therefore, if for example you are employed, but have a another job which is self-employed, you will not be eligible.
- In order to minimise fraud and people setting up as self -employed now, the scheme is only open to those who have submitted a tax return for 2019. If you did not submit your tax return by the 31 January 2020, and have not yet submitted one, you can still submit a tax return for 2019 for a further four weeks from today.