Here are a few of the FAQs we’ve received from clients regarding the job retention scheme.
What if only certain employees are furloughed?
Employers need to designate which employees are furloughed, If you are not placing everyone on furlough, you should consider carefully which employees it applies to.
It may be worth getting advice from employment law/ HR specialists as the decision may result in discrimination claims from those who allege they were made to do it because of their age, disability or pregnancy.
Think about those workers whose skills will continue to be in demand. This may help justify why some were furloughed and why others were not.
You might also consider asking for volunteers across the workforce
There does not appear to be a maximum number of employees who can be furloughed.
What is the 80% grant based on?
The maximum grant will be calculated per employee and is the lower of:
• 80% of ‘an employee’s regular wage’ and.
• £2,500 per month.
Plus the associated employers’ national insurance contributions (NIC) on this amount and the minimum automatic enrolment employer pension contributions on that wage.
This gives a maximum cap of £2,500 +£245 (employers’ NIC) + £59 (auto- enrolled pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.
The grant is only available in respect of employees on the payroll at 28 February 2020.
What about bonuses, commission, fees and overtime?
Fees, commission and bonuses should not be included in the calculation of the employees regular wage. It is unclear at this stage how overtime will be treated.
What about workers on zero hours contracts or irregular hours?
The Chancellor said the intention was to try to cover as broad a group of people as possible. It has been suggested (as yet unconfirmed) that the 80% test would apply to such workers’ February 2020 pay.
Do employers still need to pay the full salary to the employee?
No, there is no requirement to do this, employers can do so if they wish. They would need to make up the other 20%. Many employers will chose to reduce the employee’s pay to the amount funded by the government.
What about employees on short-time working?
Furlough requires the employee to not carry out any work, so short-time working could not continue during furlough.
Employers should consider re-organising work patterns to allow for some of those on short-time working to go back to full hours and the others to be furloughed. This should be discussed with employees first. This may have employment contract implications and employment law/ HR specialist input may be required – See Q6.
If you need help or advice on the JRS or any other area of your business that we may be able to help with, please do get in touch – Avanti, here to help 01473 558866
Source: 2020 Innovation