How do you furlough an employee?

Please note that you can no longer Furlough an employee - please see below.

The Coronavirus Job Retention Scheme was originally scheduled to finish at the end of June. This has been extended until the end of October. It is critical for employers to understand the relevant dates and the fine detail. The key dates are outlined below.

The final date by which an employer can furlough an employee for the first time was 10 June. The full furlough scheme closes to new entrants on 30 June but there must have been a full 3-week furlough period completed before then for employees to continue to qualify. Employers must keep a careful record to show that the employees were furloughed on or before 10 June (although there is a limited exception to this cut-off date for those returning from periods of statutory parental leave.

Please contact Couchman Hanson if you need to discuss your circumstances in further detail.

Thanks to changes in Employment Law, you can furlough members of your staff while we all are required to stay at home. But, how do you actually do it? Let’s find out more.

The Government’s Coronavirus Job Retention Scheme, more widely known as ‘furloughing’, is designed to help employers avoid having to dismiss their staff or make them redundant during the crisis. It also helps them safeguard the viability of their business, while encouraging employees to stay at home, obeying social distancing guidelines.

In this article, we’ll look in more detail at furloughing, including, should you decide to do it, how to follow the right procedures.

What is furloughing?

Firstly, a brief recap on furloughing. The scheme allows for employees to remain at home, with the Government covering 80% of their wages, capped at £2,500 per month. Employers can choose to cover the remaining 20% themselves, but there is nothing to say that they have to.

Employers will be able to claim the money for wages back from HMRC, as well as some NI and pension contributions, using an online portal which should be up and running by April 20th. The Government hopes that the first payments will be made on April 30th, in time for the next staff payroll. This will be important to many businesses experiencing cash flow problems.  The minimum period for furlough is 3 weeks, but claims can be backdated to March 1st.

Choosing who to furlough

By and large, you can furlough any of your employees that you choose, as long as you follow existing Employment Law. The main requirement is that any furloughed member of staff must have been on your PAYE on March 19th 2020. This is because the scheme will be run through HMRC, and they will have records of those staff who have paid tax through PAYE.

If you made any employees redundant after March 19th as the crisis was unfolding, you are allowed to bring them back and furlough them. It’s also possible to rotate staff who are furloughed, as long as each employee is away from work for a minimum of three weeks. You cannot furlough team members who are on sick pay or in self-isolation, but you can furlough them after they legally return to work.

In accordance with Employment Law, you must be careful not to discriminate with who you furlough. However, if you move to protect vulnerable members of your team, such as people over 70, it should be justifiable. People who do not suffer from health conditions are not a protected class under Employment Law, so if you don’t furlough them, they may be unhappy, but they do not have a case against you.

Next steps

Once you have decided who amongst your employees will be furloughed, you need to follow the set procedure.

You must notify each employee individually if you are going to furlough them. Furloughing a member of your staff is a significant change to their contract. Therefore, it has to be done by agreement, and put in writing. The Government has asked that all records of the agreements with staff are kept for 5 years so they can be checked in the future, primarily as a means to look for any fraudulent claims that may have been made.

While on furlough

Once you have made this change to your employee’s contract, the next step is to leave them alone as much as possible. Furloughed employees are not allowed to do any work for the company, not even for an hour.

When this crisis is over, the Government will be looking to penalise companies who are trying to take advantage of this landmark gesture. If they believe you are asking the state to pay 80% of their wages while they still work for you, there could be serious repercussions.

After three weeks, you can furlough them again if you wish, for another period of three weeks.

Find out more

There is a lot of information to take in at the moment, and every business is different.

If you have any questions about Employment Law during the COVID-19 crisis, it’s time to talk to Couchman Hanson.

We are currently offering you a free, 30-minute call with a Couchman Hanson employment lawyer, where you can get all your questions answered. It’s peace of mind during these uncertain times.  

To find out more, call 01428 722189 or email enquiries@couchmanhanson.co.uk