(Changes introduced in Nov 20)
As we continue to find ourselves in these unprecedented times, many organisations are forced to think about their short, mid and long-term future.
If coronavirus continues to impact your business, this article is intended to provide advice on the key principles of furlough (full time and flexible) should you be in a position where you need to consider placing staff in furlough to safeguard the future viability of your business.
The government has extended the CJRS (Coronavirus Job Retention Scheme) to support individuals and businesses who are impacted by disruption caused by coronavirus (COVID-19) this winter.
The extended furlough scheme will operate in the same way as the original scheme did during August 2020. Some Key facts are as follows:
- The scheme is open until March 2021.
- Employers can claim, and must pay their employees at least, 80% of their normal pay up to £2,500 per month.
- Employers will have to meet employer NIC and pension contributions.
- Both flexible furlough and fulltime furlough are available. Flexible furlough will continue to apply so employees can receive their normal pay for any hours that they work and receive the grant for the remaining unworked hours. Please see an example calculation in the next section of this article.
- You are still able to ‘top up’ the 80%.
- If you wish to make any claim for furlough payments in November these need to be claimed by 14 December 2020
- The furlough scheme will be reassessed in January 2021 despite continuing until March 2021. The government will review whether the economic circumstances have changed and will then consider whether to change the 80% contribution. It is possible that employers will be asked to contribute more. You may therefore want to only agree to furlough until the end of January and then reassess when you know what the terms are for Feb and March 2021.
- Under the furlough scheme, redundancies can still be implemented. However, the furlough grant cannot go towards redundancy pay. In addition, the cost of notice pay after 1 December cannot be covered by the scheme.
- It remains possible to continue claiming the 80% grant from the government to cover most of the cost of holidays during furlough. You, of course, need to ‘top-up’ to 100%.
Calculating Flexible Furlough
Employee ‘X’ is contracted £60,000 per year (£5,000 per month) on a 40 hour per week contract.
The organisation requires ‘X’ to work 50% of their hours (20 hours per week).
|Pay for Hours worked (20 hours)||£2,500 per month (£5,000 x 50%)|
|Pay for hours on Furlough (20 hours)||£1,250 (£5,000 x 80%, capped at £2,500)
x 50% for the unworked hours).
Please remember that unless the employment contract allows, the employee will need to consent to be on furlough. As HR Specialists we are happy to provide a draft HR letter template and help if calculations as needed.
We very much hope that with news of a vaccine the impact of Coronavirus will improve in the coming months. We are here if you need HR consultancy support in navigating these strange times and in the future as needed.
* While we support many companies in the southwest (Bristol, Bath, Cardiff, Somerset, Swindon, Wiltshire and Gloucestershire to name but a few), we also provide remote HR advice and support to companies across the UK. In response to increased levels of home/remote working, we can offer ALL of our services remotely.
Get in touch for an informal, free no-obligation chat about how we can help: send us an email or give us a call