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This article was published on April 6th, 2020
We have previously published a news alert with guidance regarding the so-called “furlough scheme” which we hope you found helpful. Overnight on 4th April, the Government updated this guidance to clarify several areas and below is a summary of the key updates for you to be aware of:
Employers can claim under the scheme for all employees provided that they were on PAYE on 28th February 2020, this is not limited to those who would otherwise have been made redundant. The employer must also have enrolled for PAYE online, which can take up to 10 days, so if you haven’t already done this now is the time.
If an employer is receiving public funds for employee salary payments the Government expects the employee won’t be furloughed, i.e. the employer cannot receive 100% of funds in the normal way plus 80% of an employee’s salary through the furlough scheme.
If an employee was made redundant on or after 28th February an employer can re-hire them, furlough them and claim through the scheme. This can also apply to other employment terminations, such as where an employee resigned. However, be aware of the following in relation to resignations:
Employees who have been furloughed can work for another employer.
Company directors can be furloughed for their PAYE salary but cannot do any work other than comply with their statutory duties. There is no detail in the guidance but this is likely to be extremely limited. Furloughing a director will also need to be passed by formal resolution with the approval of the Board.
An employee’s furlough notification must be in writing and records kept for 5 years.
Discretionary bonuses and commission, tips and benefits in kind are not included in what can be reclaimed by employers but wages, fees and compulsory commission payments are.
Employees can be furloughed multiple times but each period must be for a minimum of 3 weeks.
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Thorneycroft Solicitors is committed to ensuring that your privacy is protected. Should we ask you to provide certain information by which you can be identified when using this website, then you can be assured that it will only be used in accordance with this privacy statement.
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