Redundancies & furloughing: What do businesses need to know?
The Coronavirus outbreak has prompted mobility, access and independent living businesses up and down the country to shut their doors until further notice – causing an understandable amount of anxiety for employers and workers.
In an effort to safeguard people’s jobs, as well as their health, the UK government has announced a scheme aimed at easing the pressure of COVID-19 on businesses, including a measure called ‘furloughing’ which allows employees to receive money from the government when they’re not working during this time.
However, the complexity of these measures have been a cause for confusion for UK businesses, many of whom have been left scratching their heads, unsure if they qualify and worried they’ll be out of a job when this is all over.
With the Coronavirus Job Retention Scheme going live yesterday, Danny Aldridge, founder of Space Recruitment, Hiring People and Check-a-Salary, has provided some expert advice to help companies navigate the unfamiliar waters of furloughing.
By Danny Aldridge
Here’s my guide to help clear some of the confusion surrounding furloughing and redundancies, letting businesses know everything they need to in regards to both during the outbreak.
A Guide to Redundancies
Talk of redundancies during this time has inevitably increased. However, businesses and employers are encouraged to do everything they can to avoid this. This means taking advantage of government schemes and cash grants specifically introduced to help companies avoid compulsory redundancies.
Advice to avoid redundancies also includes:
● Applying for voluntary redundancies and early retirements
● Undergoing temporary lay-offs (in accordance with employee contracts and with the stipulation that they are re-employed in the future)
● Short-term working
Unfortunately, businesses may still be forced into reducing their workforce. In these cases, the normal legal requirements and terms of redundancy still apply.
A Guide to Furloughing
‘Furlough’ is a term never before used in UK employment law, but it essentially means ‘a leave of absence’ – generally undertaken without pay. However, under the government’s Coronavirus Job Retention Scheme, companies are now able to place staff on paid furlough, which has enabled businesses to keep their employees on the payroll without them working. In other words, if a business has had to close down due to Coronavirus, the government will pay the wages of employees who would have otherwise been laid-off due.
What are the terms?
Any business with a PAYE scheme created on or before 28 February 2020 can place employees on furlough. If your company is a business, public authority, charity or recruitment agency and has a UK bank account, then good news – you’re eligible. This means the government will pay 80% of employees’ average monthly wages (up to £2,500 a month), including flexible workers and those on a zero-hour contract. If employees have been on sick leave or quarantining in line with government advice, then don’t worry, because they will also be eligible as soon as they return to work.
Unfortunately, not everyone is entitled to paid furlough under the job retention scheme. If you’ve changed jobs between the end of February and the government announcement in March, then you may not be covered. The same goes for those on maternity leave, sabbatical and migrant workers.
Furloughed employees will start to receive payment from April, and will continue to be taxed on their income – but just won’t be required to work. The only stipulations are that employees must be placed on furlough for a minimum of three weeks, and may not undertake any work for the employer during the period – which means rotating furlough workers is out of the question.
This scheme is initially in place for three months, which means employees could potentially be furloughed until June, with the possibility of extension if circumstances don’t improve by then. Just be aware that there are no guarantees workers will be able to be kept on once the scheme has finished.
We’re living in unprecedented circumstances right now, and it’s unknown how long they’ll last. For now, however, it’s important that employers know their rights when it comes to these new government regulations in order to ensure the best for their business and their workers.
Check-a-Salary was founded in 2017 to help businesses, job seekers and employees calculate salaries for almost any job across the UK. Check-a-Salary’s platform provides insight on incomes collated across multiple sources and includes every industry.https://thiis.co.uk/redundancies-furloughing-what-do-businesses-need-to-know/https://thiis.co.uk/wp-content/uploads/2020/04/Redundancies-and-furloughing-throughout-coronavirus.jpghttps://thiis.co.uk/wp-content/uploads/2020/04/Redundancies-and-furloughing-throughout-coronavirus-150x150.jpgBusiness SupportCoronavirus NewsGovernment & Local AuthoritiesKnowledge HubNewsroomRecruitment TipsSector NewsCheck-a-salary,Coronavirus Job Retention Scheme,Danny Aldridge,employment,furloughing,Hiring People,pandemic,RedundanciesThe Coronavirus outbreak has prompted mobility, access and independent living businesses up and down the country to shut their doors until further notice - causing an understandable amount of anxiety for employers and workers. In an effort to safeguard people’s jobs, as well as their health, the UK government has...Calvin BarnettCalvin Barnettcalvin@thiis.co.ukAdministratorTHIIS Magazine