All UK businesses are eligible.
How to access the scheme
You will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required
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.
The above is the HMRC guidance.
Please be aware that you MUST check your contracts to see if you have the contractual right to bring this in, as it has employment law implications.
If you do not have it in your employment contracts then it needs to be negotiated with the employee – but if the choice is this or to be laid off this might be the better option.
You should send your employee a letter stating the date it is coming in – this is the point where you will be able to claim back the 80% ie a month may be prorated 100% up to a point and 80% thereafter but this needs to be clarified. You will also need to put in review dates – four weekly might be appropriate. Don’t forget to act on these dates.
What we don’t know
80% of what? – wages can be made up of many elements and we do not have a definition to date. How are Zero hours employees affected? – we don’t know yet.
What about the minimum wage increases? – we suspect that these will be implemented and it will be 80% of the new rates – but again – to be confirmed.
What about Director/shareholders – don’t know yet but many will still be working in some capacity.
SO – if planning to do this – check your contracts – if it allows for short time working issue letters stating the dates.
Will you be paying 100% and reclaiming the 80% or just paying the 100% – need to be really clear to your payroll provider.