The latest guidance released by the Government was to announce that the qualifying date for when an employee has to have been on your payroll has changed from 28th February to 19th March 2020. This will benefit more organisations, as it enables them to claim through the scheme for employees who joined just prior to lock down.
Furlough leave has to be a minimum period of 3 weeks (for companies to be able to claim the Government grant) but provided this requirement is met, you can rotate employees on periods of furlough leave, if necessary.
A condition of the scheme is that the furlough agreement has to be in writing and kept for five years, to allow for HMRC to audit the scheme.
The agreement must include a clause on the requirement for the employee to cease all work for the employer and any linked organisation.
Employees can now work for other companies / organisations while they are on furlough leave without impacting the grant received by the employer. This is to help fill resource gaps in certain sectors (healthcare admin, delivery drivers, etc.) that could be filled by people who are on furlough leave. However, employment contracts often have a clause preventing this, or requiring employees to gain consent before committing to another job. It is up to employers whether to uphold or waive this clause, where it exists.
Employees who are shielding (those who are vulnerable or elderly, i.e. at high risk of severe illness from coronavirus because of an underlying health condition) can be placed on furlough leave.
Employees who cannot work from home, but need to stay at home with someone who is shielding or have caring responsibilities resulting from coronavirus, can be furloughed.
Employers are free to switch employees from sick pay to furlough and vice versa (although this should not be abused by using furlough to ‘top up’ small amounts of SSP for short term absences).
The Furlough Scheme is not limited to those employees who would otherwise be made redundant. It applies to any who are unable to work “by reason of circumstances as a result of coronavirus or coronavirus disease”.
A director who is furloughed can only undertake work to fulfil a duty or other obligation arising from an Act of Parliament relating to the filing of company’s accounts or provision of other information relating to the administration of the director’s company.
The amount of salary used for calculation for the employee must disregard anything which is not “regular salary or wages”. So that means you cannot include any performance related bonus or discretionary payments (including tips), any conditional payments (e.g. where a threshold/ limit must be met) and any non-financial benefits.
• Employers will have to submit claims through an HMRC portal.
• The HMRC portal is planned to open on April 20th 2020 and Payrollers are advised to get ahead.
• Pension rebate calculations will be made on the minimum auto enrolment level.
• Rebates are likely to take ten days.
• The reclaimable NI and pension elements are on the furlough salary, not normal salary.
• No part of the reclaimed grant can be siphoned off to fund benefits; the entire grant must be paid to the employee (with no deductions for fees, administration charges etc.).