All information was valid as of 15:30 on 26th March 2020. Some of the information included will be based on the speaker’s opinion.
On Thursday 26 March 2020, we were joined by Becky Boston, BGP Alumna and co-founder of Emphasis HR & Training.
Following government advice, many businesses have been forced to close and as a result many employees are being furloughed. With all of this new terminology and different advice being provided on a daily basis, the handling of employees can be extremely difficult for business owners.
Becky provided us with a detailed insight into what it means to be furloughed and gave some great advice around the steps that companies will need to take.
What is furloughing?
A process in which employees are instructed to not work for a period of time and are put on a government payment scheme called Coronavirus job retention scheme (CJRS).
What is the Coronavirus job retention scheme?
On 20th March, the Government announced the package of measures that will support employees and workers during the epidemic, including the coronavirus job retention scheme.
This means that all UK employers will be able to access a financial subsidy worth 80% of the workers wage costs, capped at £2500 per worker per month.
The objective of this is to allow businesses to keep staff at home whilst retaining them for when they rebuild their businesses in the future.
Eligibility:
- All UK-based businesses are eligible to access this scheme, including large and small businesses, charities, partnerships and not for profit organisations.
- The employee must have worked for the company on the 28th of February. If you have already laid off employees or put them on redundancy, you can back date to the 1st of March.
- Any employees that have been on the payroll system are eligible.
- Employees must be completely inactive to be eligible for the scheme, they cannot be furloughed when on reduced hours.
Top tips for managing the furlough process:
1) Manage expectations from the outset
It is very important that you present to your employees what you are intending to do and get a simple agreement from them that they are willing to accept this, this can be by letter or email.
If you intend to furlough employees, you need to write to them straight away and inform them that you’re not sure what their payment is going to be and as soon as you know what they are being paid, you will let them know. Communicate twice with employees, once to say this is our intention (to put you on furlough) and then again to confirm exactly what they will be paid.
It is very important that you make your employees aware that they may not get the full 80% after pension contributions, national insurance etc.
2) Avoid discriminating when choosing who should be furloughed
Becky suggests that the best way to approach furloughing employees is “to think about it is if you are doing a redundancy scheme” employment laws still apply and you shouldn’t discriminate against people.
You must be influenced by your business needs and just as usual you should avoid discriminating.
3) Top up the 80% with caution
Although businesses can choose to top up the 80%, Becky advises that employers should act with caution when doing this as you don’t necessarily know how much that top up will need to be.
If you do choose to top it up, review this on a week-by-week basis because you don’t know what your cash flow is going to look like and you don’t want to overcommit.
If you are interested in receiving further business support throughout these unprecedented times, please visit the BGP Response Hub and register for our upcoming events.