31st March 2020
Many employees that do not fall into the ‘essential worker’ category have been adjusting to working from home. Some have sadly been let go from their jobs and others are in limbo as their company faces significant challenges during these unprecedented times.
We understand that there are a lot of employees out there who are currently apprehensive about what the future holds for them, their job security, finances and entitlements and we hope to simplify Furlough Pay and the new Government initiatives to give you some clarity.
With non-essential shops, hospitality, leisure and services having to temporarily close their doors due to restrictions imposed by the Government, many people are in a position where they may be able and willing to work but are unable to carry out their duties at home like some office-based workers are able to do.
Put simply, furlough relates to a temporary leave of absence. This occurs when the needs of the employer change, usually in quite rapid or extreme circumstances – such as a natural disaster or economic downturn.
Although employees are not being made redundant, they are temporarily not required to work by the company due to the business either operating with skeleton staff or having to close altogether. Employees will be expected to return to work in the near future or once the workplace is able to re-open.
During the time that the employee is furloughed, the employee will not be required and/or able to carry out any work.
The Government has been quick to react to the devastating set back that businesses and individuals would face if thousands of employees lost their jobs and companies were to go into liquidation.
Employers will have access to a government grant that will cover 80% of employee’s wages, up to a cap of £2,500 per month under the Coronavirus Job Retention Scheme where both employee and employer agree to furlough and if the employer is unable to operate or have no work for the employee to do because of COVID-19.
The Employer can choose to top up the Employees pay with an additional 20% payment if they have the financial means to do so, but this is not something they are required by law to do.
The scheme will cover wages payable from the first day of furlough to (currently) the end of May, although those who were on the employer’s payroll run on 28th February 2020 that were made redundant in March 2020 but then re-engaged following the introduction of this scheme, can have their wages backdated to 1st March 2020.
Your pay will continue to come from your employer in the usual way.
Anyone who is employed by the company or who has been subject to PAYE, meaning that some directors and casual workers will be entitled, who were on the employer’s payroll on or before 28th February 2020. New employees taken on or after 1st March 2020 are excluded from the scheme.
Monthly earnings are calculated as follows:
Bonuses, commissions and fees are not included as part of your monthly earnings.
All UK businesses are eligible to claim under this reimbursement scheme, including charities and not-for-profit organisations.
You are restricted from carrying out any work for the company who you are a furlough worker for.
You may be able to take on another job outside of your contracted hours with a different employer during this time, but this will be dependent on the terms of your employment contract and should be cleared/authorised by your current employer first.
You can volunteer or train, provided that this does not involve the manufacture or creation of an item or part thereof than can yield revenue for the company, the provisions of services to the company, or the provision of any service that can yield revenue for the company.
The Government have introduced a new law which allows for any employee to be able to carry over their basic 20 days statutory annual leave entitlement into the next two years annual leave years if they are prevented from taking this. Any holiday entitlement over and above this would be subject to the terms of your contract, handbook or at your employer’s discretion.
Your employer can also give you reasonable notice to take your statutory holiday (outside of any furlough period).
An employer can still choose to terminate your employment on the grounds of redundancy (subject to employment law compliance) whilst you are furloughed.
If you are an employee there is nothing that you need to do at this point. Your employer may be in touch shortly to confirm if you are to be classed as a furlough worker for the coming weeks and they will then carry out the necessary paperwork and submissions to HMRC.
If you have questions about your employment status, employment rights on entitlements in relation to covid-19 and your job then please get in touch with our Employment Law Specialists who will be able to guide you further.
Call us on 01256 844888, email email@example.com or speak to our online chat assistant. We are putting health and safety first and our lawyers are working remotely in order to continue to support local employees. Therefore, we can offer you a telephone or video conference appointment in the comfort of your home (and ours).
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.
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