27th March - Furlough & JRS


The online portal is still not live – but more details of the Job Retention Scheme have been released. This is aimed at employees but is relevant to employers as well:


•         Furlough must be agreed between employer and employee and this must be confirmed by a letter from your employer.(We have sent clients a format of the letter that has been circulated.) Send this to employees that you have decided to Furlough and ask them to sign to say they accept.
•         You must have been on your employer’s payroll on 28th February 2020 – the type of contract you are on does not matter.
•         If you are currently on sick leave, you will get SSP and can be furloughed once your sick leave finishes.
•         The grant will start on the day you were placed on furlough and can be backdated to 1st March.
•         If you were on the payroll at 28th February but have been made redundant due to Coronavirus, your employer can agree to rehire you and put you on furlough.
•         More than one job?  You can be furloughed by one employer and continue to work for another if your employment contract allows.
•         If you are put on furlough by more than one employer you will receive separate payments from each employer.  The cap of £2,500 applies to each job.

Furlough and Benefits:

•         If you are claiming Universal Credit and earning less as you are now on furlough then your payment might change.
•         Maternity Leave – If you are eligible for SMP or Maternity Allowance the normal rules apply and you will be entitled to claim up to 39 weeks.
•         SMP – same rules apply also first 6 weeks 90% of your normal wage and 33 weeks at the statutory flat rate (£151.20 from April 2020).
•         Some employers top up SMP and if you are eligible for enhanced (contractual) maternity pay this will be included within wage costs that your employer can claim through the scheme.

How much you will get:

•         You will be entitled to 80% of your monthly earnings,  subject to a maximum of £2,500.
•         Your employer can choose to top this up to 100% but they do not have to.
•         Furlough will be claimed for a minimum of 3 weeks and for up to 3 months.  This may be extended subject to Government review.

Wages will be calculated using an averaging method:

•         If you have worked for one year for your employer you will receive 80% of the higher of your earnings for the same month last year or an average of your monthly earnings for the last year.
•         If you have worked for less than one year your employer will claim an average of your monthly earnings since you started work.
•         If you started work in February 2020 your employer will pro-rata your earnings from that month.
•         Bonuses, commissions and fees are not included as part of your monthly earnings.
•         The above is to include all employees, including agency workers and those on zero hour contracts.

Whilst on furlough your employer can still make you redundant.

1)      Decide who you want to Furlough and from what date ( you need to put this date in the letter which is on the paragraph ‘The Term Furlough ……………..’
2)      Send them a letter outlaying this – Use your standard letter attached, amending the highlighted areas and sent to your employee.
3)      Receive back confirmations.
4)      Advise us of the employees that you are Furloughing and the date this commenced.Forward copies to Voice & Co if we prepare your payroll.

This 80% calculation will obviously take us quite a while – some employees that are on a monthly salary are fairly easy although we will still have to go back 12 months to see if there salary has changed. For employers with lots of workers on O/T and who get bonuses this will be more time consuming.

Please advise us as soon as possible who you decide to Furlough and whether or not you are topping it up to the 100%. Do not wait for their confirmation but it will be required before they get the pay. We can then be performing the calculations whilst you wait for confirmation. I cannot see any reason why an employee would not agree but you never know.

I would like to thank all clients for restricting calls to us. We have had many e-mails but few calls. E-mails are quick and easy to respond to but calls take, on average, at least 20 minutes. We will of course update you as we receive additional information.