Where your employees can't work because CoronaVirus has made them redundant, but you don't want to lay them off, you can now class them as "Furloughed" this means that you can reclaim 80% of their wage up to £2.5k per month, plus the associated Employer NI contributions and minimum automatic enrolment employer pension contributions on that wage, from the Government if you keep them on.  But they cannot be working.

Please bear in mind that the Government are urgently working on building a system for this to be reclaimed, they have said this will be ready by the 20th of April, but realistically we are not expecting that you will receive any grant payments till May.  You will need to pay your furloughed employees 80% of their pay until then, with a reclaim in April/May so please make sure you have the cash available for this, or the employee will have to wait (but they may not be too happy about that).

Please contact us if you need a legal agreement to provide to your furloughed employees.

Some finer points relating to furloughed employees:

  • You cannot backdate your claim from the government if they have been working.  The support from the Government starts on the day they stop working.

  • There is a cap for each employee of £2,500 per month. This includes NI and pension.

  • Commissions, bonuses, tips etc are only covered if they are contractual and "not conditional on any matter".

  • Pension still needs to be paid.

  • Holidays will still need to be accrued.

  • We don't know if they need to remain as furloughed through the whole period for an eligible claim.

  • They have to be not working due to a lack of business, not because of other reasons, e.g. childcare.

  • It most likely won't be available to Directors, but if any of the Directors can't work on anything, then they can be furloughed.

  • You have to have a fair process across all staff and not give preferential treatment to certain staff members.

  • If you make them redundant after their furloughed period they will still be entitled to statutory redundancy pay.

Here is an interesting podcast for you to listen to about furlough.    

Here's the link to the signed legislation.