The employer guidance states that to access the scheme you will need to:
HMRC will reimburse 80% of furloughed workers’ wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan”.
The employer guidance suggests this is something business can just tell employees but this is not the case according to the employee guidance on furloughed workers. The two sets of guidance should be read in conjunction with one another.
Furloughed workers isn’t presently a concept in employment law. Alternative shorthand for this status might be “government backed standby workers”. How staff are managed to get to the status where business can claim the 80% is important.
Furloughed employees will be kept on payroll and importantly, should not undertake work for the employer during the furloughed period. The employer has a choice as to whether or not to fund the 20% pay differential.
The scheme will run for at least 3 months backdated to 1 March 2020 – potentially being extended.
As always the devil is in the detail and we do not yet have the regulations available. We expect these to be published shortly. What is clear though is that furlough leave is subject to existing employment law so please take advice before acting. In particular you may wish to consider the following:
For more information about any of the issues in this article, please don’t hesitate to get in touch with Glenn.firstname.lastname@example.org or telephone 0114 228 3282 or any member of our multi-award winning team.
If you are concerned your business has made errors in the uptake and administration of the coronavirus job retention scheme (CJRS) or are facing the prospect of a Furlough Fraud investigation by HMRC, our team of specialist Furlough Fraud Lawyers can offer you tailored legal advice and specialist representation.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.