How Does Furlough Work For Employers and Employees During the Covid19 Crisis (Updated April 2nd 2020)

How Does Furlough Work For Employers and Employees During the Covid19 Crisis (Updated April 2nd 2020)

Claiming your employees wages through the Covid19 crisis

During these unprecedented times the Government has stepped in realising that people will not be able to work. This would mean the economy would take a huge dive, people would have no money and the amount of people affected by this virus would sky rocket. So the Government have produced the Furlough Scheme (Coronavirus Job Retention Scheme) for employers and employees

Claiming your employees wages through the Covid19 crisis

As the Cvid19 crisis grows the Government tries and help people as best as they can spending billions of pounds to keep families fed and businesses ready to start when the crisis is over. The last prediction for the self-employed was that in excess of 800,000 small and medium businesses will no longer trade at the end of this. That means millions of jobs will have gone and the universal credit claims have gone up by 10 fold in the last week alone. Some amazing figures of money have been said throughout the media of what the Government is spending. In truth I do not think any one knows.Most of the money will go sustaining the economy and helping families through the hardship, this is a guide to how employers can claim the furlough scheme for their employees throughout this crisis.

The so called Furlough Scheme is ” Coronavirus Job Retention Scheme ” and the system has been put together quickly so the service is not open as yet, it is expected to be ready late April 2020. Employees can be Furloughed through the HMRC portal.

This scheme is open to all employees who are on PAYE before 28th February 2020, and will last at least three months from March 1st 2020 The scheme will pay 80% of the employees wage to a maximum of £2,500 per month plus National Insurance contributions plus minimum automatic enrolment employer pension contributions on that wage and this scheme can be used at any time within the three month period

Employees eligible for this scheme

Employees to claim the furlough scheme must be on PAYE from the 28th February 2020 and can be of any type of contract.

  • Full time
  • Part time
  • Zero hour contract
  • Flexi hour contract
  • Agency contract

If you were made redundant after 28th February 2020 and the re-hired you can also claim the scheme.

If you are claiming the scheme you can not work for your employee in any way or that generates the employee an income for services etc.

Money from this scheme is still taxable and open to normal deductions.

If you are being paid from your employee you can not claim on this scheme.

The employer and employee must agree to be furloughed and must be a letter of intent written between the two sides.

Why should you be furloughed?

If you can not work safely within the guidance of the Government for the Coronavirus

Employees on unpaid leave

If you were on unpaid leave before 28th February you can not be furloughed, only after 28th February you can be furloughed.

Employees who you are on sick pay

If you are shielding then you can be put on furlough

If you are off sick or self-isolating then you will be paid sick pay and then can be furloughed after this.

If you have more than one job

If you have more than one job then you can be furloughed by one or both of the jobs the cap applies individually.

Volunteer work or training.

If you do volunteer work you still can claim furlough.

If you are doing training with your employer you must be paid from your employer as long as the employer is not making a profit at that time for your training.

If you are on maternity leave

You must abide by the Government guide lines as normal and pay as normal.

What you need to claim as an employer

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 furloughing of 3 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.

The Furlough scheme is a temporary scheme which will run for approximately 3 months starting from 1st March 2020 this will stay under review until further notice.

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2 April 2020 / 3 Comments / by / in ,
  • Safeena says:

    Hi am on maternity leave which is now finish I need to go back to work on 1st may but I have told my employee that I can’t come back yet coz of my kids r home from school and there no one to look after them I have 4 boys but I been told to come back or had my notice in I don’t know what to do

  • adeel shahzad sheikh says:

    Shit scheme.

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