Here are some additional details regarding the Furlough scheme.
Closing date for Furloughing employees
It has been announced that the existing scheme will close to new entrants on 30 June. However, in reality it closes on 10th June. This is because this is latest date you can furlough an employee to allow for them a full three weeks on furlough before 30 June 2020.
Therefore, you need to decide before 10th June if there are any employees who are not currently furloughed that you may want to furlough. You have the flexibility to bring back the furloughed employee full time or part time from 1 July.
If you have not furloughed any staff, but wish to do so, contact us so that we can assist you with ensuring the paperwork is correct
Holiday pay cost – use of Government funding by planning
Employees accrue holiday in the normal way while on furlough and could therefore return to work with a significant amount of accrued holiday. For example, full time employees who have been furloughed for say 3 months would have built up an entitlement for over one weeks paid holiday even though they haven’t been at work.
In a clarification to the Furlough rules an employer can make staff take some of the time they are on furlough as holiday leave, which would only cost the employer 20% where the Government pays 80% of the employees’ wages (as opposed to the employer paying 100% of the holiday pay, with a further weeks output lost, once the employee is brought back from furlough).
You should therefore consider whether furloughed employees should take holiday while on furlough. There are rules regarding how much notice you have to give staff so contact us for advice.
Reclaiming Notice Pay under the Job Retention Scheme
It may be tempting to leave staff on furlough and then decide if they are to be made redundant when the Government funding ends. In this case you would have to fund both the statutory redundancy cost and also the pay in lieu of notice.
This is not covered directly in the government guidance however it appears that you should be able to reclaim notice pay if an employee is serving their notice whilst on furlough.
Therefore, if you are intending to make redundancies, you should consider giving notice of Redundancy such that their notice period is covered by their furlough period.
Redundancy processes, calculation of the notice pay and furlough rules can be complex and should be considered carefully. Please contact us to discuss before taking any action.
We are here to help so please contact us if you wish to discuss any of the above