Undoubtedly you have seen or heard details in relation to the Coronavirus Job Retention Scheme that is available to UK business to support employers. Under this scheme all UK employers will be able to access support from the Government to continue paying part of their employees salary for those employees that would otherwise have been laid off or made redundant during this crisis. Once opened this scheme will be backdated to commence on 1 March and will initially run for 3 months.
The only criteria to qualify for the Scheme are:
- The business has employees
- The employees are not provided with work
Employers will need to designate those employees that will not be provided with work as “furloughed workers”.
HMRC will reimburse 80% of furloughed workers wage costs up to a cap of £2,500 per month. This cap will include employer pension contributions and national insurance contributions.
HMRC are currently working on the mechanics of how this system will operate. It does however appear that as the employer you will be required to pay the employees and then HMRC will reimburse your business. We do not currently believe this claim will be through your payroll software and understand that HMRC are working on a dedicated claim portal through their website. Naturally, this is a priority for them and we understand the portal should be available and claims will be reimbursed 'within weeks' and it is hoped 'before the end of April.'
Where there is no existing contractual right to place employees on lay off or short-time working, employers will require written consent from the employee for them to be place on furlough leave. Where the employee does not agree to go on furlough leave, employers may decide to consult with those staff for redundancy.
it is understood that employers will have discretion over whether or not to top up the workers' salaries from the 80% grant in line with their normal salary expectation. In most cases, the employer must seek agreement (in writing) with the employee with regards the topping up payment or lack of it, but once more in many cases it will boil down to a discussion over acceptance or dismissal. Ideally the employee should be made aware that they may be eligible for financial support through the welfare system, including universal credit, should they receive any reduction in their wages.
If the outcome of the matter may result in the dismissal of an employee (including a dismissal on the grounds of redundancy), you should ensure you seek advice at all relevant stages of the procedure and, as a minimum, prior to effecting any dismissal.
Whilst all the details of this scheme have not been disclosed by the government, we thought it essential that you have some sound knowledge of the support to be offered to you as an employer, to enable you to manage your business at this difficult time in an effective manner. We will, of course, update matters as the details emerge.