BHETA support providers share urgent update with regards to furloughed staff
On 15 April 2020, the government issued a Statutory Direction setting out requirements for the Coronavirus Job Retention Scheme, also known as furlough leave. Ellis Whittam have highlighted two urgent points to bring to your attention, which are as follows:
The requirement for a written agreement from both employer and employee to be furloughed. This contrasts with the current online guidance, which simply says “To be eligible for the 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. Therefore, if you haven’t already got written agreement to be furloughed from your employees, you should seek this now. A template email can be found HERE – please ensure that all relevant information is inserted into this before sending it to affected employees.
Many employers have placed employees on furlough and not continued to pay them until such time as HMRC paid the grant under the scheme, currently there is nothing in the online guidance to suggest this is not allowed. However, the new Direction seems to suggest that you can only recover monies from HMRC that have already been paid – effectively the grant amounts to a reimbursement of monies paid. The requirements appear to be as follows:
If between 1 March and 18 April there has been a period in which an employee has been furloughed and you have not paid the employee what they would get under the scheme, you will have to make up the pay they would be due under the scheme for that period BEFORE you make a claim.
For any period after 18 April, if you have not paid an employee what they would get under the scheme while they are furloughed, you will not be able to make that pay up later and, therefore, you cannot be reimbursed by HMRC for that period. Effectively, we think this means that if you continue to not pay employees 80% of their salary (subject to the £2,500 p/m cap), you will not get money from HMRC.
It’s important to also note that this Direction can be changed at any time by the government, Ellis Whittam suspect it probably won’t be changed before the proposed introduction of the scheme, which is due to go live on 20 April 2020.
Please refer to Ellis Whittam’s Coronavirus Advice Hub, for new guidance and templates. If you need further information, then of course please contact 0345 226 8393 and state that you are a BHETA member to qualify for free advice.
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