Job Retention Scheme Update and New Furlough Template Letters!

Welcome to Week 3 of the National Lockdown! Team Howarths hopes that you all had restful weekends.
On Friday night the government released some further details about the Job Retention Scheme and the mechanics of furlough leave. This update outlines all of the key developments and whilst there are still some unanswered questions, we are getting there. As soon as we have more information to share, we will let you know.
In addition to providing confirmation of the new details regarding the Job Retention Scheme, we are also working on a series of template letters which we hope you find useful. These will include an updated letter furloughing employees for those that have not already taken such a step, letters to bring furlough leave to an end and laying off employees who refuse to be furloughed. Once finalised, you will be notified and these will be uploaded to your Client Portal which is accessible through our website www.howarths-uk.com.

Latest government updates

Following Friday’s update we are now clear on the following additional points:

• Employees can start a new job with another employer when on furlough leave. This will mean that they can receive 80% under the Job Retention Scheme and 100% of a wage in a new role. Employees must ensure that they have their employer’s consent to obtain alternative employment.
• An employer can reclaim 80% of compulsory commission back from HMRC as well as basic salary. We can assume that this will be calculable with reference to a 12 week average.
• Employer can also reclaim 80% of “fees” from HMRC although we currently have no idea what the government means when it refers to “fees”.
• The 80% will definitely not include non-monetary benefits (e.g. company cars or health/ death in service insurance benefits).
• Company directors who are furloughed can still perform their statutory duties but not undertake any other work for the company. Where a furloughed director needs to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose.
• Employees can definitely be furloughed multiple times but each furlough period needs to be at least three weeks in length.
• Employers must notify employees of their furlough status in writing and keep the record of that written notification for five years.
• In order to make a claim an employer must have enrolled for PAYE online- this can currently take up to 10 days to process.
• Foreign nationals, visa nationals and sponsored workers can be furloughed subject to existing equality and discrimination legislation.
• Employees who are currently shielding can be furloughed if they are unable to work from home and you would otherwise have to make them redundant.
• Employees on fixed term contracts can have their contracts renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term contract ends during the furlough period no grant will be paid.
• Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies. Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients. Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.
• To be eligible for the 80% grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.
• Grants will be prorated if an employee is only furloughed for part of a pay period.
• Claims under the Job Retention Scheme should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they written to confirming their furloughed status.

As soon as we hear more, we will let you know!