Furloughed workers: Q&As

>>Furloughed workers: Q&As

Vandana Dass, Solicitor and Managing Director – Davenport Solicitors

Rishi Sunak, the Chancellor, introduced the Job Retention Scheme in order to assist businesses and to protect employee’s wages during the coronavirus pandemic. We talk to Vandana Dass at Davenport Solictors to find out more.

What is the job retention scheme?

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been made redundant during this crisis.

Who is eligible?

All UK businesses are eligible.

How can businesses access the scheme?

Businesses will need to:

  • Designate affected employees as ‘furloughed workers,’ and notify them of this change -remember changing the status of employees remains subject to existing employment law, so businesses are likely to require employees to agree to this.
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. You should note that existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a coronavirus business interruption loan.

What does “furlough worker” mean?

If you cannot cover staff costs due to COVID-19, as a business you may be able to access support to continue paying part your employees wage, to avoid redundancies.

If you intend to access the Coronavirus Job Retention Scheme, you will need to discuss, becoming classified as a furloughed worker, with your employees. This would mean that they are kept on the employer’s payroll, rather than being made redundant.

To qualify for this scheme, the employee should not undertake work for the employer while they are furloughed. This will allow the employer to claim a grant of up to 80% of the employee’s wage for all employment costs, up to a cap of £2,500 per month.

They will remain employed while furloughed. The employer could choose to fund the differences between this payment and the employee’s salary, but does not have to.

It is likely that the Coronavirus Job Retention Scheme will run for at least 3 months from 1 March 2020, but will be extended if necessary.

If you need further guidance on furlough workers or the Job Retention Scheme you can contact employment lawyers Davenport Solicitors on contact@davenportsolicitors.com or 0207 903 6889.

By | 2020-03-30T14:01:47+01:00 March 26th, 2020|Business Partners, Coronavirus, Employment|