As a direct result of COVID – 19 businesses are finding themselves in a position where due to business interruption cash flow is becoming a serious issue.
To assist businesses at this time the government has set up the ‘Coronavirus Job Retention Scheme’ which is open between March and May (this will be reviewed). The scheme provides an alternative to offering ‘lay-off’ working or ‘redundancy’ to staff, helping businesses to retain their employees whilst providing financial support to them.
The scheme is available to all UK employers with a PAYE scheme in place and any employee who has been employed as of the 28th February 2020. Please visit the Government website for full details on how to make a claim.
Employees will be entitled to receive at least 80% of their current wage during ‘furlough’, capped at £2,500 gross per month. This may be topped up by the employer once agreed.
Furloughed employees will not be able to work for the employer during this time however, voluntary work is permitted as long as the work does not make any money for the business.
It will be necessary to obtain the employees express permission to be classed as a ‘furlough’ worker and a variation to their contract of employment should be put in place for good order. In some cases where over 20 employees are involved it may be necessary to carry out a consultation. However, if you already have a ‘lay off’ clause in your contract of employment you do not need agreement.
Should an employee not agree to ‘furlough’ working you should advise them that this could result in them being ‘laid-off’ or made ‘redundant’.
Following any period of ‘furlough’ working the employee can return to their duties where possible. However, it may be necessary for the employer to still consider ‘lay-off’ or ‘redundancy’ depending on their situation.
If you require any assistance with documentation or just some friendly advice please do contact me when I will be happy to help