The Government has announced that it will implement a nationwide lockdown across England starting on Wednesday 6th January 2021 and will run until further notice.
This will mean all non-essential outlets closing including pubs, restaurants and luxury shops. What will this mean for your business? These FAQs have been put together to answer some of your questions and concerns.
In light of the Government's announcement to invoke a National lockdown from Wednesday 6th January 2021, they have recognised that they need to aid businesses and protect viable jobs. Therefore, the Job Retention Scheme is being extended until April 2021. This extension covers employees who are eligible to be fully furloughed or flexibly furloughed.
The Job Support Scheme, which was due to replace the Job Retention Scheme from the 1st November, has now been put on hold until the Job Retention Scheme closes.
The Job Retention Scheme extension started on 1st November 2020.
Those employees who have remained furloughed or flexibly furloughed up to and including 30th October 2020, will continue to be protected under the extension with no break in furlough support.
If employees were made redundant on or after 23rd September 2020 they can be eligible under the CJRS. As long as they were employed on the 23rd September 2020 and their earnings notified to HMRC on an RTI submission between 20th March 2020 and the 30th October 2020, then they can qualify for the scheme if you re-employ them.
Whether you are claiming for employees on the existing Job Retention Scheme or Flexible Furlough Scheme, the same rules continue to apply under the extended Scheme.
Employees must have appeared on the employer's RTI scheme prior to the 30th October 2020, been included on an RTI submission between the 20th March 2020 and 30th October 2020 and operate a UK bank account.
Neither the employer nor the employee needs to have been previously furloughed or have used the Job Retention or Flexible Furlough Schemes to be eligible for the extension.
For claims up to the 31st October, the existing rules apply in that you can only claim up to the maximum number claimed for in any claim period prior to 30thJune 2020. From 1st November, there is no maximum number of employees you can claim for.
There are certain rules that an employer will need to check before they claim for employee pay through the Job Retention Scheme:
1) The employer had a UK PAYE Scheme started on or before 30th October.
2) The employer has enrolled for PAYE online.
3) The employer has included the employees on a submitted Real Time Information (RTI) submission on or before 30th October.
4) The employer has a UK Bank Account.
Mutual agreement should be reached between the Employer and Employee. The Employer should set a date when the furlough situation will be reviewed. The Employer must write to the employee confirming the discussion and agreement reached. The employee can, but does not have to, sign to say that they have read and understood the change of employment terms and conditions.
Once agreement is reached, the Employer will need to submit a return to the HMRC for the hours worked by the employee (if applicable), contracted hours as per the employee's contract of employment and the hours being claimed for under the Job Retention Scheme. The Employer must keep these records for at least five years.
The furlough period must be for a minimum of 7 days. Aside from this period, the employees can remain furloughed or flexibly furloughed for as long as the employer needs them to be up to the cessation of the Scheme.
The Government has stipulated that any non-essential outlets should be closed on 6th January until pending further review. Infrastructure, Construction and Manufacturing should all remain open and continue as normal where possible.
No. An employee cannot undertake any work for the Employer during any hours where a furlough claim under the Job Retention Scheme is made. The employee must not be involved in any activity that makes money for the Company or provides services for the Company or any organisation linked to it.
An employee can undergo training, provided the Employer pays a minimum of National Minimum Wage for the hours spent training. They can also volunteer or work for another employer, not associated with the Company, if contractually allowed to do so.
The Employer will be responsible for paying the National Insurance and Pension Contributions, along with any hours worked as is currently the case.
The Government will reimburse Employers up to 80% of salary capped at a gross monthly amount of £2,500. This figure will be reduced accordingly by the number of hours worked if the employee is flexibly furloughed.
When working under Flexible Furlough, the Employer must pay the Employee for all hours worked.
Employees retain all of the rights that would normally apply under normal employment terms and conditions including SSP, annual leave entitlements, maternity, paternity and adoption rights, rights against unfair dismissal and redundancy payments.
As before, you will need the length of your claim period, the different elements of the wages you should include (salary, wages, non-discretionary commission and over time etc), and the employees' worked and furloughed hours. You cannot claim for any discretionary payments or Benefits in Kind.
Be aware that if you miscalculate the hours worked and the employee works more or less than the claim submitted or you include discretionary payments, you will need to contact HMRC to make an adjustment.
As before, the rules from 1st November remain unchanged and the minimum period is 7 days at a time. The only exception to this is if you are claiming for the start or end of a month and the employee has been furloughed during the month immediately before or after it.
You will be able to claim shortly before, during or after your payroll run. Claims must be made by 11:59 14 calendar days after the month you are claiming for. You cannot submit a claim more than 14 days before your claim period end date.
Whilst an employee could technically be allowed to be paid less than the National Minimum Wage whilst being paid 80% of their salary, the minimum rate must be paid for all hours worked by an employee and also for any training hours carried out whilst they are on furlough.
The employee accrues all holiday entitlement whether they are working or on furlough i.e. a minimum of 5.6 weeks, which can include Public Holidays.
If the employees normally take the Public Holidays as leave, then the employer will need to either top up the pay to 100% as above or give the employee the public holiday in lieu.
If an employee is flexibly furloughed, then any holiday taken during this claim period should be treated as furloughed hours rather than worked hours.
If an employee takes their holiday whilst on furlough, the employer must top up the furlough payment to 100% of their contractual pay, which is either the employee's normal rate of pay or 52 weeks average earnings where their pay varies.
Please be aware that an employer cannot furlough an employee for the sole reason that they are taking part of their annual holiday.
Employers can enforce employees to take their annual leave whilst on furlough by giving the employee twice the amount of notice period as the holiday period to be taken i.e. 1 week's holiday = 2 weeks' notice.
Employers are also able to cancel planned holiday by giving the employee the same notice as the holiday period itself i.e. 1 week's holiday = 1 weeks' notice to cancel.
There is no longer any official shielding category for clinically extremely vulnerable employees. These employees should work from home where possible. If this is not possible, and they cannot attend the workplace, then they are able to be furloughed if they meet the eligibility criteria.
Clinically extremely vulnerable employees should receive new written correspondence from their GP to confirm their status.
Furloughed employees retain their rights to be paid Statutory Sick Pay (SSP), subject to meeting the eligibility criteria. It is up to the Employer whether they elect to take them off furlough and pay SSP or leave them on furlough at their furloughed rate.
Employees receiving SSP cannot be included on any claim under the Job Retention Scheme and the employer is responsible for paying SSP to the employee.
Employees that are self-isolating and/or suffering from symptoms of COVID-19 may be eligible for SSP from day 1. Employers may be able to claim back SSP under the COVID-19 SSP rebate scheme up to a maximum of 2 weeks.
These employees will be entitled to SSP, subject to meeting the eligibility criteria. The Job Retention Scheme cannot be used for covering short term sickness.
The Government's current advice is that employees should work from home if they can work effectively. This means that it is not a mandated right for an employee to work from home during the lockdown period.
If the business needs employees to attend the workplace during the lockdown period, then they can request the employee to do so as long as they have adhered to the Government's Working Safely guidelines:
https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19
From the 1st December 2020, the Government have now stipulated that a Company cannot claim furlough for any contractual redundancy notice period.
The answers to these questions have been put together using the HM Government's Guidance Notes, published from 23rd December 2020 onwards.
If you have any questions that we have not covered here or need to ask any specific questions, please do not hesitate to contact us at sales@hrsmartuk.com or call us on 01903 754107.