June 2020 – New Furlough Scheme and HR Implications
Employment Update for Small Businesses
This month’s update is all about the Coronavirus Job Retention Scheme, commonly referred to as the Furlough Scheme, now that Furlough is very definitely the word of 2020 (at least in HR circles!) The new Scheme was announced on Friday and further details have been clarified over the weekend. We report on that here, as well as the HR and employment law implications.
Also we touch on the issue of staff who are reluctant to come back to work, particularly those who were shielding and have now been told they no longer need to shield. Finally a brief item on updates to the Statutory Sick Pay scheme.
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.
Here is the link to the Government’s update on the Scheme. It is very important that you note that the latest date for furloughing anyone who has not yet been placed on furlough is 10th June. YOU CANNOT FURLOUGH ANYONE AFTER 10TH JUNE. The 10th June is stated because the employee will need the minimum three weeks on furlough before the current scheme ends on 30th June, before the new Scheme kicks in on 1st July. To be very clear – YOU CANNOT PLACE SOMEONE ON FURLOUGH UNDER THE NEW SCHEME, THEY MUST ALREADY BE ON FURLOUGH AND TO HAVE BEEN ON FURLOUGH SINCE 10TH JUNE OR EARLIER.
Many of you have been rotating staff on furlough – i.e. placing them on furlough for three weeks, then having them come back to work whilst you place other staff on furlough. Clearly that will no longer work under the new scheme, but as you will see you can instead bring staff back part-time whilst still having their non working hours treated as furlough.
From 1st July – you will be able to allow anyone who is already on furlough to come back to work on a part-time basis whilst remaining on furlough for the hours that they do not work. You will have to pay them full pay for the hours they work (and you cannot claim any of that back). You continue to pay them for the hours they do not work on the furlough rate, or higher if that is what you have agreed, and you can claim back 80% for those hours as normal.
From 1st August – the government will continue to pay 80% of wages (capped at £2,500 per month) but you will no longer be able to claim back employers’ National Insurance and pension contributions.
From 1st September – the government will pay 70% of wages up to a cap of £2,187.50 per month, and you will have to pay the other 10% (plus NICs and pension contributions).
From 1st October – it is 60% from the government, capped at £1,875.00 per month) and you pay 20% plus NICs and pension contributions.
The New Furlough Scheme
HR and Employment Law Implications
Placing staff on furlough is not quite as simple as just doing it – you to check first of all if you have the contractual right to lay staff off work in the first place. If you do, then it was quite straight-forward to have them agree to go on furlough (and receive 80% pay) as an alternative to being laid off on virtually nil pay.
If you want furloughed staff to come back part-time, then again you need to check the contractual position. If you have the right to lay off, then you are very likely to have the right to place staff on short-time working also (it is normally bound up in the same clause in the contract). That means you can force them to go on part-time hours and part-time pay. So again, it will be to their benefit to accept the part-furlough arrangement, so that they continue to receive 80% pay rather than nil for the hours they do not work.
If you do not have the contractual right to lay off, then you would have reached agreement with staff to go on furlough. You will need to reach agreement also to put them on a part-furlough arrangement, so you will need to plan how this may work and consult with your staff accordingly. It would be advisable to have them sign to confirm their acceptance of any new working arrangement.
What it they do not want to come back to work?
The government yesterday updated its guidance for those who are considered clinically extremely vulnerable. They had been told to “shield” for 12 weeks, with further extensions to that timescale for some. This meant self-isolating, to the extent that they should not leave home for any reason (including going to work). Where they were unable to work from home, most have been placed on furlough, quite reasonably.
The new guidance states that, whilst they remain vulnerable and should continue to take precautions, they can now leave home if they wish, as long as they are able to maintain strict social distancing. The guidance says that they should make every effort to work from home and that the employer is expected to help them to do so. It does not specifically state that they can go back to the workplace, with a lot of emphasis on looking at options (e.g. furlough, alternative roles, or even claiming SSP – see next section, below), but the implication is that they can go back to work as a last option.
Clearly some people who have been shielding will not want to come back to work, and I would suggest it would be risky to try to force them against their will (e.g. with the threat of disciplinary action). If you do want to insist, please contact us for further advice. In many cases, it will be preferable to leave them on furlough, but clearly there will be cost implications for doing that from 1st August. So that may be the point to review the situation.
Statutory Sick Pay
Extended in light of Test and Trace
You may recall that the SSP scheme was updated several weeks ago, so that SSP is now payable from day one (rather than day four) if the absence is in connection with Coronavirus. You are also able to claim back up to two weeks’ SSP if it is paid in connection with Coronavirus.
This would cover anyone who was off work because they had symptoms of Coronavirus and were self-isolating in accordance with the government’s rules; if they lived with someone who had symptoms and were self-isolating as a result; or if they were shielding on NHS advice. This has now been extended to cover anyone who has been contacted under the new Test and Trace system and told to self-isolate for 14 days.
National Minimum and Living Wage Rates
The current National Living Wage and National Minimum Wage rates are:
£8.72 per hour for workers aged 25 and over
£8.20 per hour for workers aged 21 to 24
£6.45 per hour for workers aged 18 to 20
£4.55 per hour for workers aged 16 and 17
£4.15 per hour 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.