Furlough – what’s changed and what’s the same?

Shortly before the current lockdown, the government announced that the Coronavirus Job Retention Scheme (also known as the furlough scheme) was to be replaced with the Job Support Scheme (JSS) from 1 November 2020. The Chancellor, Rishi Sunak, then announced that the furlough scheme would remain open until 31 March 2021.

This changing state of affairs has created uncertainty in the minds of employers and employees alike over what has changed, and what remains the same.

The Legal 500 recommended HR and Employment Teams at Blanchards Bailey have received a surge of new instructions recently from clients needing clarity over the current scheme. This easy-to-digest guide seeks to answer some of the most frequently asked questions over the current furlough scheme, whether you are an employer, an HR manager or an employee unsure of your position.

  • The extension starts from 1 November 2020 and is currently expected to last until 31st March 2021.
  • Employers can claim even if the employees they wish to place on furlough leave had not previously been on the scheme.
  • The furlough leave scheme can be flexible, i.e. employees can continue to do some work.
  • Employees can be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding) but don’t have the automatic right to be.
  • Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for.
  • Employers are required to pay 80% of an employee’s usual salary for hours not worked.  Employers may claim back the 80% up to a maximum of £2,500 per month for November and December 2020.  It is expected that the percentage that may be claimed back will be reviewed in January 2021.
  • Employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee, unless they re-employed an employee after 23 September 2020.
  • There is no maximum number of employees that employers can claim for.
  • Employees returning from maternity leave need to give the statutory eight weeks' notice to end maternity leave early in order to be furloughed.
  • The employer must confirm in writing to the employee that they have been furloughed and keep a written record for five years.
  • Employers can agree retrospectively to furlough someone with effect from 1 November 2020, provided the agreement to retrospectively claim furlough occurs on or before 13 November.

In practice, if an employer wishes to furlough a member of staff, the employer should consult with them, i.e. ask them if they are prepared to take furlough leave for a set period of time.  The employer also needs to consider whether it wishes the employee to take full furlough leave or flexible furlough leave (flexible leave allows an employer to ask staff to work some hours).

Once agreed it must be pointed out that there will be a reduction of pay and that, as this is a change to a fundamental term in the employee’s contract, there will need to be a formal record of the temporary change in writing. As long as the employee agrees, leave can start immediately but it is advisable that the employer issues a letter setting out the terms of the agreement to the employee before they start. If the employee does not agree then the employer will need to look at other strategies for minimising staffing costs.

For detailed advice on your rights and responsibilities under the extended furlough scheme, contact Jane Cordner on 01258 488220 or jane.cordner@blanchardsbailey.co.uk

Blanchards Bailey

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