Eat Work Art guide to Furlough and Job Retention

Under new guidelines, from March 1st companies are now able to ‘furlough’ employees to ensure they can retain staff in the long term. Through this scheme, the government will pay up to 80% of people’s wages, up to a maximum of £2,500 per month. Anyone working in a full time job (or on a PAYE basis) on February 28 can be furloughed. This includes people on zero hours contracts or those working flexibly.

Any UK organisation with employees can apply, including:

• Business
• Charities
• Recruitment agencies
• Public authorities

Furloughed employees must have been on your PAYE payroll on 28th February 2020 and can be on any type of contract, including:

• Full-time employees
• Part-time employees
• Employees on agency contracts
• Employees who were made redundant since 28th February, if they are rehired by their employer

Any UK employer can apply to the scheme to temporarily cover people’s salaries, including businesses, charities, agencies and public authorities. Employees have to agree to be put on furlough — and an individual can’t apply by themselves.

There is no requirement for the business to be considered “essential” in order to access the scheme. Nor is it necessary for employers to show that they are suffering any sort of financial hardship. If employers are already receiving public funds, they are expected to use them to cover the staffing costs rather than also applying for the furlough scheme.

Companies can find out whether they are eligible to claim furlough for their employees in relatively simple steps.

First, prove that its employees cannot do their jobs due to the coronavirus measures put in place by the government.

Second, notify employees of their new ‘furloughed’ status.

And finally, submit information to HMRC about furloughed employees to set up a system for reimbursement.

What you’ll need to make a claim

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.To claim, you will need:

• Your ePAYE reference number
• The number of employees being furloughed
• The claim period (start and end date)
• Amount claimed (per the minimum length of 3 consecutive weeks)
• Your bank account number and sort code
• Your contact name
• Your phone number

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

For all Government information on guidelines and applicability, please refer to the website here. Croner has also produced a very useful toolkit for employers and employees in relation to Furlough here.