Fish and chip shop bosses have just a few days left to furlough any workers they wish to claim for under the Coronavirus Job Retention Scheme (CJRS).
The extended scheme, announced by the Chancellor last week, starts on 1st July, however, only staff who have been furloughed for three weeks before 30th June are eligible to take part. This means bosses have until Wednesday 10th June to inform their employees who is going to be furloughed, if they have previously not been furloughed.
Andrew Sanford, a business advisory partner at tax and advisory firm Blick Rothenberg, comments: “Employers considering furloughing additional staff must start the consultation immediately in order to meet the 10th June deadline, and to give the furloughed staff adequate notice. For those businesses who have not yet made any claims, all claims for periods up to 30th June must be submitted by 31st July 2020.”
Employers should also be aware that from 1st July they cannot have more employees on furlough than they had in previous claim periods.
From 1st July, flexible furloughing is allowed, which enables employees to work part-time while on furlough. Although further guidance will be issued on 12th June, the scheme entitles employees to be paid their full-time rate for the hours worked and the furlough rate of pay for the hours they are not working.
Andrew explains: “For an employee earning £24,000 per annum, or £2,000 per month, who works two days per week from 1st July, the employer will pay £800 per month (40% x £2,000) and the grant which can be claimed will be £960 (60% x £2,000 x 80%). In September, the employer will contribute 1/8 of the £960 furlough grant, plus pay all of the relevant NIC and pension costs.”
With businesses expected to pay Employers National Insurance and pension costs as of August and to top-up wages in September and October, some shop owners may be considering redundancies. In this instance, they are reminded that the redundancy consultation process can take up to 45 days, and that there is a requirement to pay at full rate during any statutory notice pay periods. Andrew adds: “If employers are considering redundancies, they should take legal advice, as the costs of redundancy are also dependent on specific contractual terms.”
Employers are also being encouraged to understand how the extended CJRS will work as well as the costs involved. For example, in a situation where an employee takes holiday during a furlough period, they would still be entitled to their full salary for any days taken.
Andrew adds: “This means that employers will need to top-up the furlough amount for holidays and Bank Holidays. Employers may prefer to ask employees to take time off in lieu when the employee returns to work, but this should be discussed and agreed with the employee. Holiday entitlement will continue to accrue while an employee is on furlough. Many furloughed employees may not take a holiday. This therefore represents an ever-increasing cost to the employer.”