Latest News from BPCA

09 July 2020

UPDATED: Furloughing pest management workers and the Coronavirus Job Retention Scheme (JRS)

Furlough is the HR word of the moment, and it’s causing some confusion among employers and employees alike.

What is it and how does it work?

NOTE: IMPORTANT DATES

It’s important to note that the scheme will close to new entrants from 30‌‌ June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30‌‌ June.

This means that the final date that you can furlough an employee for the first time will be 10‌‌ June for the current three-week furlough period to be completed by 30‌‌ June. Employers will have until 31‌‌ July to make any claims in respect of the period to 30‌‌ June.

31st October: The CJRS ends. Employers will receive no further government funding for employees who are affected as a result of the pandemic.

furloughing pest management workers

(Article updated 17 June 2020 to include new information.)

Furlough: what does it mean?

Traditionally, to furlough an employee means to grant them a leave of absence, either on reduced pay or no pay for the duration.

It’s a way for employers to avoid laying people off while saving money in the short-term, and it ensures job security for those employees who have been furloughed.

It is something employees can request, but it must be ultimately granted by the employer.

‘Furloughing’ is not a term we generally use in the UK, being more common in places such as the US.

Coronavirus Job Retention Scheme (JRS)

From Friday 20 March 2020, the chancellor, Rishi Sunak, announced a raft of measures to protect businesses, including government support in the shape of the Coronavirus Job Retention Scheme, allowing employers to ‘furlough’ staff, rather than lay them off or make them redundant.

The Coronavirus Job Retention Scheme is a temporary scheme open to UK employers for at least three months, starting from 1 March 2020.

BPCA furlough graphic 2 Page 1

It is designed to support employees and protect their incomes, when they may otherwise have been laid off due to a downturn in their employer’s operations during the pandemic.

Employers can claim for 80% of furloughed employees’ usual monthly wage costs, up to £2,500 a month, which includes Employer National Insurance contributions and minimum automatic enrolment employer pension contributions.

The JRS is being backdated to the start of March, so if you have recently been laid off as a result of Covid-19 you can call your employer and ask them to reconsider putting you on furlough instead, with the state paying your wage at 80%.

The company can use discretion to top that up to 100% but they don't have to.

It’s important to remember that the initial 80% is not coming out of the employer's pocket.

Update: The Job Retention Scheme has now been extended until the end of October 2020.

It was announced today (12 May 2020) that the Coronavirus JRS will be extended for another four months, with workers continuing to receive up to 80% of their wages upto £2,500.

Update (1 June 2020): Extension of Coronavirus Job Retention scheme and roll back of Government support

The scheme, which was extended until October 2020, will soon start relying on more employer support.

From August employers will be asked to cover National Insurance and pension contributions for furloughed workers (on average around 5% of total employer costs).

In September, employers will be asked to pay 10% of furloughed workers’ wages rising to 20% in October.

So the government will pay 70% of wages up to a cap of £2,187.50 and employers will pay 10% of wages to make up to 80% total, up to a cap of £2,500.

Employers will pay Employer National Insurance (ER NICS) and pension contributions (combined with the 10% above, for the average claim this represents 14% of the gross employment costs the employer would have incurred, had the employee not been furloughed).

From October the government will only pay 60% of wages up to a cap of £1,875.00. Employers will pay 20% of wages to make up to 80% total, up to a cap of £2,500.

Employers will pay Employer National Insurance (ER NICS) and pension contributions (combined with the 20% above, for the average claim this represents 23% of the gross employment costs the employer would have incurred, had the employee not been furloughed).

From 1st July, employers will be able to furlough employees on a part-time basis (they must apply by 10th June). This will require employers to pay their normal rate of pay for any hours worked – further advice on how to calculate what you can reclaim in this situation will be released on 12 June 2020.  

Update (9 July 2020): Furlough bonus

UK employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of 31 January 2021.

Who can claim under the Coronavirus JRS?

This scheme would enable employers to retain their employees for at least the short term, without having to worry about possible redundancies, also giving employees comfort around their ongoing status and pay for the short term.

The scheme was previously open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020, allowing them to access financial support to continue to pay part of their employees’ salaries.

However, the government have released further guidance, which has extended the cut-off date for when employees started new jobs to 19 March 2020.

This now means that thousands of individuals who previously did not qualify for the scheme because of their start date, will now be eligible to be furloughed.

If you are PAYE for a contracted employer, and you started on or before 19 March, the company can put you on furlough under the Coronavirus JRS.

Note: HMRC must have been notified that the employee was on the payroll through RTI submissions on or before 19 March.

Employees could have started working before 19 March, however if the company’s pay run means that HMRC was not notified through RTI submissions, they are unlikely to be eligible for the scheme.

The extension also applies to employees who were employed as of 28 February 2020 and on payroll, who were either made redundant or left employment before the 19 March, if their former employer is happy to re-employ them and place them on ‘furlough’. 

Any UK organisation with employees can apply, including:

  • Limited companies
  • Sole traders
  • LLPs
  • Partnerships
  • Charities
  • Recruitment agencies (agency workers paid through PAYE)
  • Public authorities.

You must have created and started a PAYE payroll scheme on or before 19 March 2020 and have a UK bank account.

If you are PAYE for a contracted employer, the company can put you on furlough under the Coronavirus JRS.

Where a company is being taken under the management of an administrator, for example in the case of rent-to-own retailer BrightHouse, the administrator will be able to access the Job Retention Scheme.

How much can be claimed

As mentioned, you can claim the lower of £2,500 or 80% of an employee’s wages. For salaried employees, this can be as of their last pay period up to 19 March 2020. 

For employees with more than 12 months’ service whose wages vary, you can claim the higher of:

  • Same month’s earnings from the previous year
  • Average monthly earnings from the 2019-20 tax year.

If an employee has been employed for less than 12 months, then an 80% average of their monthly earnings to date can be taken.

Furloughed staff receiving 80% of their normal wages can receive this amount even if this means, based on their normal contracted working hours, that it would bring them below the normal appropriate minimum wage.

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.

Sickness absence

The Coronavirus Job Retention Scheme is not intended to cover short-term absences, so any employee isolating or on sick leave because of coronavirus should not be furloughed if they will be returning to work once their period of sickness is over. That employee is instead eligible for statutory sick pay from day one of their absence. 

However, if employers want to furlough workers for business reasons and someone is currently off sick, they can do so.

The individual would no longer receive SSP and will instead be classed as a furloughed worker.

Employers are able to claim back through the job retention scheme and SSP for the same employee, however not for the same period. An employee is either sick or furloughed at any given time.

If an employees becomes sick while on furlough, they retain their statutory rights, including the right to Sick Pay. This means if a furloughed employee becomes sick they must be paid at least SSP. It is up to the employer to decide whether to keep these employees on furlough or to move them on to SSP.

If an employee moves onto SSP and the absence is not related to the Coronavirus, then employers will be responsible for paying the SSP themselves and will not be able to claim this back. However, should they decide to keep the employee as furloughed, they will be able to continue to make a claim for the employee through the Job Retention Scheme.

How to claim

Claims will be made through an online portal, which has now been rolled out (20 April 2020). 

You can access the HMRC portal here: gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

You can also apply for a number of other financial schemes designed to help businesses weather the Coronavirus storm.

Throughout this period, you should be furloughing employees wherever necessary and appropriate.

You should consider allowing furlough for employees who are in the “at risk” category and have been told by Public Health England to self-isolate for 12 weeks. This is known as "shielding".

This scheme is designed to protect incomes and to help mitigate the spread of Coronavirus.

If an employee is in the “at risk” category but has been informed that they must work or face 12 weeks’ unpaid leave, they are almost certain to ignore self-isolation guidance and continue working, leaving themselves exposed to the virus.

Furlough should also be considered for staff who have childcare issues, unable to take their children to school and with no alternative options but to stay home.

You must ensure that you either seek agreement to changes employees’ contracts of employment or that you already have the contractual right to do so. 

To claim, you will need:

  • Employer PAYE reference number
  • Number of employees being furloughed
  • National Insurance Numbers for the furloughed employees
  • Names of the furloughed employees
  • Payroll/employee number for the furloughed employees (optional)
  • Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
  • Claim period (start and end date)
  • Amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • The relevant 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, so you should keep these records for at least five years.

If you have fewer than 100 furloughed staff you will be asked to enter details of each employee you are claiming for directly into the system – this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).

If you have 100 or more furloughed staff you will be asked to upload a file with the information, rather than input it directly into the system. They will accept the following file types: .xls .xlsx .csv .ods.

The file should include the following information for each furloughed employee:

  • Name
  • National Insurance number
  • Claim period and claim amount
  • Payroll/employee number (optional)

Furloughing and pest management emergencies

A number of BPCA members have asked if furloughed employees can still carry out emergency call outs.

Advice received from BPCA Business Shield makes it clear that furloughed staff cannot work:

Furlough is a measure the company can take when there is a genuine situation of layoff or redundancy.

Any employee carrying out some work cannot be furloughed and alternative arrangements made between the employer and the employee.

It may be that the employee is put on short-time working if the company has the contractual right to do so.

This could be in the company T & Cs or handbook, in the form of the below clause:

2. Temporary Lay Off/Short Time Working:

2.1 In the event the Company is faced with a potential redundancy situation due to a shortage of work/unforeseen circumstances, e.g., flood, fire/external influences or changes in market needs, it may be necessary to consult with you in an attempt to safeguard your employment. The Company reserves the right to introduce short time working or a period of temporary layoff without pay where this is necessary to avoid redundancies or where there is a shortage of work. Any short time working would have pay reduced proportionately.

2.2 If a lay off situation arises after all efforts have been exhausted, you may be entitled to the current statutory guaranteed payment.

If the company does not have the above clause to lay off, short-time working or furlough employees, the company would have to seek express agreement before any changes can be made to their working contract.

UPDATE: From 1st July, employers will be able to furlough employees on a part-time basis (they must apply by 10th June). This is known as the Flexible Furlough Scheme.

Flexible Furlough Scheme

Up to now, employees have no been permitted to undertake any work whilst they are on furlough.

However, from the 1 July this will change:

  • Employers will be able to flexibly furlough employees who have previously been furloughed for up to 3 weeks
  • Employers will be able to bring employees back to work for any amount of time or any working pattern
  • Employers will still be able to claim for the hours not worked that the employee would usually work
  • Employers do not have to take all employees off permanent furlough, so therefore could have some employees remaining on furlough and some on flexible furlough to help meet the needs of the business.

In order to flexible furlough employees, employers will need to seek the agreement of employees and should keep a written record of the flexible furloughing agreement.

HMRC will be able to carry out restrospective audits of businesses which have used the scheme, so employers should ensure that the agreement is kept on record for up to 5 years, as well as ensuring that a record of all hours worked are kept on file for up to 6 years. 

You can calculate how much you can claim for an employee on flexible furlough on the government website

HMRC will be able to carry out restrospective audits of businesses which have used the scheme.

Important information for making flexible furlough claims

It's important to note that claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless you’re claiming for the first few days or the last few days in a month.

You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.

For example, you couldn’t submit your first claim for a single 1 week period between 29 July 2020 and 4 August 2020.

Please also be aware you should match your claim period to the dates you process your payroll, if you can.

You can only make one claim for any period so you must include all your furloughed or flexibly furloughed employees in one claim, even if you pay them at different times. If you make more than one claim, your subsequent claim cannot overlap with any other claim that you make.

Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps inbetween the dates.

You can claim before, during or after you process your payroll; you can usually make your claim up to 14 days before your claim period end date and you do not have to wait until the end of a claim period to make your next claim. Claims for periods after 30 June can be made from 1 July.

When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period. This means that you should claim when you have certainty about the number of hours your employees are working during the claim period.

If you claim in advance and your employee works for more hours than you have told HMRC about, then you will have to pay some of the grant back.

Payments will be made 6 working days after you make your claim.

MORE HR SUPPORT

For more advice, members have free access to BPCA Business Shield, an online portal which gives you access to Health and Safety, Environmental and Employment Law advice and guidance.

BPCA Business Shield

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