Employment Update for Small Businesses
The Job Retention Scheme (Furlough Scheme) ended yesterday (31st October) and the new Job Support Scheme (JSS) was supposed to start today. However, the Government has now announced that the Furlough Scheme is to be extended to December on an enhanced basis and the JSS will be postponed until the Furlough Scheme finishes. Read on for more.
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The new Scheme is open to employers who have not used the previous furlough schemes
Employees can be placed on the Scheme even if they have not been furloughed previously
To be eligible employees must have been on your October payroll
The extended Scheme is better than the one that has just ended – it reverts to how the Scheme was in August, with the Government paying the full 80% of salary (capped at £2,500) and employers only having to pay NI and pension contributions.
You can fully furlough staff or put them on part furlough (with the unworked hours being covered by the Government up to 80% – capped at £2,500)
Further details from the Government can be found here.
Putting Staff on the Scheme
HR and employment law considerations
If you have previously furloughed staff, you will remember that you need the arrangement to be documented with an agreement. You may have the contractual right to lay staff off temporarily, in which case you have the upper hand and employees would be wise to accept a furlough arrangement rather than be laid off without pay. If you don’t have that contractual right, you will need clear agreement from staff to accept the furlough arrangement. If you are unsure whether you have the contractual right, please contact us to check. Please also contact us if you need any support with furlough or flexible furlough agreements.
New Furlough Scheme
You may have heard that HMRC are concerned that there has been a lot of fraud perpetrated in connection with the Furlough Scheme and they are likely to carry out a lot of checks over the coming years to try to claw back some of the money paid out. It is vital, therefore, that you have properly documented all your furlough arrangements. It would be advisable to audit your paper trail and if you are missing any agreements put them in place now and backdate them. You need to retain the paperwork for at least 5 years.
One of the essential elements of the Furlough Scheme is that staff must not work while furloughed. They can carry out training as long as that does not generate income. So please bear that in mind and ensure your staff understand that they must not work whilst on furlough. Taking part in redundancy consultation does not count as carrying out work for this purpose.
Unless the Furlough Scheme is changed (and more detailed guidance is promised by the Government) you are able to consult with staff whilst they are on furlough and they can also be on notice of redundancy whilst on furlough. So if you are planning on making redundancies, this may buy you some time but you will still need to plan ahead to ensure you achieve this fairly. Please contact us for any assistance.
Up to now, it has been possible for staff to take holiday whilst on furlough (they must receive full pay for holiday periods, but you can still claim back some of that under the Scheme). I assume the extended scheme will still allow this but further guidance is to follow. If you want to compel staff to take holiday you can do so by giving them notice – the notice period must be double the length of the holiday period to be taken (e.g. 2 weeks’ notice for 1 week’s holiday). Contact us if you need any help with this.
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.