Peter Etherington
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Employment Update for Small Businesses
April 2020

Dear Subscriber

HMRC have just updated their guidance relating to the Coronavirus Job Retention Scheme for Furloughed Workers. It clarifies a few points but the question of employees taking holiday whilst on furlough still remains unanswered. Don’t forget also, that National Minimum and Living Wage rates have gone up from 1st April. Read on for more.

Finally, my offer of FREE HR ADVICE related to Coronavirus still stands. Please click here for a reminder of what is on offer.

Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.

Please forward this email to any of your contacts who might find it of benefit.

Regards
Peter Etherington
Tel: 01664 668164

www.etherington.co.uk

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Peter Etherington
HMRC Update
Coronavirus Job Retention Scheme (Furloughing Staff)
Areas Clarified or Changed

Notifying Employees
Employers must notify employees in writing that they are classified as Furloughed Workers and a record of the notification must be kept for at least five years. If you have used one of the letters we provided through an earlier newsletter, that will suffice.

Second Jobs
Employees can start a new job or carry on in a second job, whilst they are on furlough, provided that this is permitted under their employment contract (or that you have agreed with them that they can do this). For instance, if a highly paid employee is on furlough and earning  the cap of £2,500 month, you may allow them to take a job at a supermarket to supplement their income – as long as they are doing no work for you, that is permitted.

Commission
The 80% calculation can include commission that employees have been paid. It is not calculated on base pay as per the previous guidance.

Company Directors
It is possible for a Company Director to be put on furlough and to claim 80% of their PAYE pay (subject to the cap). Whilst a Company Director has statutory duties which have to continue whilst on furlough this does not count as doing work under the Scheme and is, therefore, permitted. But they cannot do any revenue generating work, etc. I suggest permitted statutory duties are likely to include filing accounts, declaring dividends, etc.

More Than One Period of Furlough
Employees can be furloughed for a period, come back to work and then be furloughed again without limit. However, each period of furlough must be for at least three weeks’ duration.

Unanswered Question

Holiday Whilst on Furlough
There is still no clarification on the question of whether or not an employer can claim under the Job Retention Scheme for an employee whilst they are on annual leave. Click here for my proposed risk averse approach to this issue. I still consider it quite likely that you will be permitted to claim for holiday periods, but that is no more than educated speculation at the moment and we could really do with clarification from HMRC

National Minimum and Living Wage Rate​s
From 1st April 2020, the National Living Wage and National Minimum Wage rates increased as follows:

  • to £8.72 per hour (from £8.21) for workers aged 25 and over
  • to £8.20 per hour (from £7.70) for workers aged 21 to 24
  • to £6.45 per hour (from £6.15) for workers aged 18 to 20
  • to £4.55 per hour (from £4.35) for workers aged 16 and 17
  • to £4.15 per hour (from £3.90) for apprentices under 19 and those over 19 in their first year*

*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.

www.etherington.co.uk