Furlough Grants update
By Niamh Kelly
2021-03-22
More on the extension of Furlough from April 2021
Despite 'pre announcing' the extension of the Furlough Scheme before the Budget a couple of weeks ago, information on the rules have been slow in coming.
On Friday evening, HMRC issued a 'Step by Step Guide' for employers, which does give us more information so I thought it might be useful to recap on some of the main points of the Furlough extension.
1. What's new
- For periods from the 1st May onwards, employers can claim for employees who were employed on 2nd March 2021, as long as they have made a PAYE Real Time (RTI) submission to HMRC between the 20 March 2020 and 2nd March 2021.
- Individuals do not have to have been furloughed before. So you could furlough 'new' people, so long as they were on your payroll and on the payroll return by the 2nd March 2021
- From the 1st July 2021, the level of the grant will be reduced on a sliding scale.. but you must still pay your employees at least 80% of their wages.
2. What's not changed
- As before, employers must confirm in writing to the employee that they have been furloughed, and keep a written record for five years. (We can help with that: contact us for assistance).
- There is no maximum number of employees that employers can claim for
- There is no minimum furlough period; flexible furlough can be used but the minimum claim period needs to be 7 days.
And a reminder of some other key points that keep cropping up....
3. Annual Leave
Staff can be on Furlough AND Annual Leave, so long as the individual receives 100% of their pay. So you could require staff to take annual leave (giving them double the amount of notification as the amount of annual leave .. e.g. for 1 week off; give staff 2 weeks notice); pay them at 100% and reclaim 80% of their wages up to 1st July.
You'll be aware that there is special guidance about the carry over annual leave. But (and this is where I think there'll be some confusion).. there is not an automatic entitlement for staff to have the leave for 2 years. This is only true of statutory (i.e. the 20 days) amount AND if the company prevented staff from taking annual leave.
The Government guidance was put in place where this occurred as normally staff would have lost leave and/or companies would have been fined under H&S legislation for not allowing staff to take adequate breaks. The guidance said that uniquely, leave could be carried forward and could be used up over the 2 years as otherwise, companies would be in the situation of everyone trying to take a huge amount of leave together at the same time.
I think there is an argument to be made that everyone was ambivalent about it.. I suspect that many companies had lots of other things to think about over the last year (!); and although you didn't prevent people from taking leave; neither did you encourage (i.e. request) staff to take leave. There does seem to be a myth out there that staff have the right to have leave when they like.. which includes being able to book leave and cancel leave without agreement. That of course is not true. Staff have the right to have leave .. but at a time of the employers choosing.
So our advice is to check out annual leave entitlement and 'require' staff to take annual leave so that you can manage this risk.
4. Notice
Staff cannot be on Furlough AND Notice. This change came in late last year; so if you are considering having to reduce your workforce, then you'll have to factor the cost of notice in.. particularly as notice must be paid at 100% of normal pay.
Of course, staff can be on notice and annual leave (subject to the point above about 'double the amount of notification as the amount of annual leave') as the individual receives 100% of their pay anyway.
5. Kickstart Scheme
A reminder that if you bring someone in via the Kickstart scheme; you do need to ensure they have a fixed term contract with yourselves.
The right to have a written statement of terms and conditions from day 1 of employment was part of employment legislation changes last year. The fact that you might be reclaiming grant money for Kickstart staff, does not exempt you from this statutory (legal) obligation.
6. Apprenticeships
There is a new grant for the hiring of Apprentices from April 2021.. and unlike the Kickstart Scheme, Apprentices can be any age!
So if you are thinking of recruiting and value experience as well as formal qualifications.. then please do consider a more mature candidate for an apprenticeship.
7. Health and Safety Detriments – employees AND workers
And finally, in the rush to get everyone back to work following lockdown.. there is a sober reminder that the government has set out new Regulations which extend the provisions of section 44 of the Employment Rights Act 1996 to workers.
Putting it simply: at the moment an employee can claim in a tribunal if subjected to a detriment because they reasonably believed that being at work would place them (or someone else, such as a household member) in serious, imminent danger. This right was rarely used before last year but is now being used frequently by employees who are anxious about travelling to, or being in, work during the coronavirus pandemic.
As a result of a recent Tribunal case, this new statutory instrument extends the protection so that it now covers 'workers', rather than just 'employees'.
Once again, plenty for companies to mull over and more to follow!
Keep an eye on our Coronavirus Hub on the top of our webpages (The HR Dept Shropshire ) for any updates and as always, please do contact us if you need any help or guidance.
As always, as soon as we have further information, we will update you!
Other Images
