In this episode of the podcast I cover the recent update to the job retention / furlough scheme following the announcement from the Chancellor on the 29th May 2020.
In this episode I will cover:
- The key changes to the scheme which come into effect on the 1st July 2020.
- Details about the impact on employees who are currently on ‘family leave’ plus listen through to the end for an addition I made following the exemption published on the 9th June 2020.
- Recommended steps and planning ideas for employers.
- Practical action points for employers.
1. The number one thing that you need to consider is the future of your business. If you have not already done so it is crucial to think – what is my business going to look like in the next 2, 3, 4 – 6 months?
2. Do you need to start making cutbacks of staff now or planning for the near future? If so, will you need to start a collective redundancy consultation?
3. Check to see if there is flexibility in your employment contracts? Consider are your workforce flexible and willing to change?
4. Ensure that any calculations and cash projections you have made now include the requirement to pay NI and pension contributions from the 1st August 2020, and then factor in the employer contribution to wages for September and October.
5. Get your ‘house in order’ and prepare your claims and timing as soon as possible. From 1 July, claim periods will no longer be able to overlap months. There is effectively a ‘reset’ of the scheme from the 1st July 2020 as it moves into what I would call phase two of the job retention scheme.
6. You will have until 31st July 2020 to make any claims in respect of the period up to 30 June 2020 thereafter you will be unable to claim for the period of ‘phase one’ of the scheme.
7. If your future planning and re-opening plans mean that it is likely you will need to bring employees back from furlough on reduced hours to start with it is important to start a dialogue with the affected employees now. Begin to prepare them for return and explain what will be required of them, where possible try to get agreement and buy-in to your plans. See my article ‘The Reluctant Returner’ about how to handle this communication.
If you would like to bring an employee back from furlough on a part-time/reduced hours basis we have produced a template letter with agreement, for you to use and you can request a free copy by sending an email to: firstname.lastname@example.org please put in the subject line ‘flexible furlough return letter’.
We also have a general return from furlough letter which includes a variety of options for you and this is also available for free by sending an email to email@example.com please put in the subject ‘return from furlough letter’ and we will email you a copy.
From the 12th June 2020 HMRC will provide more detailed guidance for employers on how to calculate the furlough claim and how the scheme will work.
Details of the scheme which is currently available can be read here: https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme
Please do leave your thoughts on this issue in the comments section below. Please ensure that any comments are respectful to all views and opinions.
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The information contained in this Podcast and post is provided for guidance and is a snapshot of the law at the time. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.
The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.
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