Extended Furlough – current scheme
· This applies from 1 November- 31st March 2021. The government have confirmed the extension from previously stated 30th November 2020.
· The government have also confirmed there will be a review in January with the potential of contribution changes for February and March 2021 to the scheme.
· Any claims under the current scheme from 1st November 2020 should be made promptly, and in any event, no later than 14 December 2020 – claims are now open on the HMRC portal from 11 November 2020.
· Detailed guidance on this is available on the Gov website here: www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme
· No notice periods, whether resignation or redundancy be able to be covered by the scheme from 1st December 2020. Should anyone be serving notice in November and the employer is using the scheme to cover 80%, this will no longer be the case as of 1st December and the employer will have to fulfil the full cost of that notice period from that date for existing and any future notice periods being served.
Any specific payroll questions should be directed to your payroll department/provider and HMRC for clarification as we cannot give specific advice guidance on how to calculate as it is quite complex and will depend on many variables.
Pay – National Minimum Wage (NMW)
When furloughing an employee who receives NMW, the government and HMRC acknowledge that the calculations and pay reference periods may take an employee wage below the NMW rate and have confirmed this is acceptable on days where an employee is furloughed. If, while on furlough, an employee is required to do training then this should be topped up to current NMW rates.
There are questions regarding employees who got a pay rise over the last couple of months. Our understanding, but this hasn’t been confirmed by the government is, it is not relevant for establishing the pay reference period for HMRC as they are not concerned with pay rises/ or national minimum wage. They are looking at what the RTI information says for each employee as that is the only way they can check out genuine cases and minimise the risk of fraud. Therefore, follow the guidance clearly on this point (but also consult HMRC or payroll as we cannot give more detail at this point).
What Employees are entitled to under the new extended scheme
All employees on an RTI submission on or before 19 March 2020 will be able to use the CJRS calculations as applied in August 2020 for reference pay and usual hours. However, for new employers claiming and new employees hired between 20 March 2020 and 30 October 2020 the CJRS methodology will update the reference pay and usual hours to take account of the period covered by the extension.
For employees on fixed pay not furloughed before, the last pay period prior to 30 October 2020 provides the basis for calculation. For employees on variable pay or hours, not furloughed before, the average of tax year 2020 to 2021 up to the start of the furlough provides the basis for calculation.
Redundancy – re-hiring employees
Employees can be re-hired if they were on the RTI as at 23 September 2020 but as previously advised, our advice is to NOT re-hire employees as it will invoke other employment law rights that, in our view, is too risky to do and we could not provide our Guaranteed HR advice service to those clients who choose to do this and then face a claim from their employee relating to it.
Sickness absence & Self-Isolation
If your employee is on sick leave or self-isolating as a result of coronavirus, they may be able to get Statutory Sick Pay (SSP[JH1]) from day one. The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness or self - isolation.
Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. Where an employee has a period of short - term illness/ self isolation they should not be placed on furlough.
If, however, employers want to furlough employees for business reasons, such as reduction of hours (flexi-furlough) or a business closure, and the employee is currently off sick then any employee currently off due to short-term illness/self-solation can also be included. The employee should no longer receive sick pay and would be classified as a furloughed employee.
Employers can furlough employees who are clinically extremely vulnerable, at the highest risk of severe illness from coronavirus or off on long-term sick leave. It is up to employers to decide whether to furlough these employees.
You can claim back from both the Coronavirus Job Retention Scheme and the SSP rebate scheme for the same employee but not for the same period of time. When an employee is on furlough, you can only reclaim expenditure through the Coronavirus Job Retention Scheme, and not the SSP rebate scheme. If a non-furloughed employee becomes ill due to coronavirus, needs to self-isolate or shield, then you might qualify for the SSP rebate scheme, where you can claim up to two weeks of SSP per employee.
The Xact team will give your business a free of charge health and safety assessment to ensure that you are legally compliant. Please contact the Xact Team to arrange your free consultation by clicking on the button.