21/04/2020
Happy Bunny - Employment Law. We have clarity on payments – AT LAST!!
I don't post much about my legal work - but this is very recent as it's largely based on the guidance updated on Friday night! In time for yesterday's payment portal opening!!
https://lnkd.in/gCJQh68
1) Date of furlough must be specified in writing and agreed. 'Agreed' was not an initial requirement so if that causes aggro, get advice.
2) Employees can be brought in and out of furlough; each period of furlough must be at least 3 weeks. Employees on furlough must not work.
3) Commission/Overtime/Bonus - CAN be included as wages for the 80% grant if it is non-discretionary, eg contractual sales commission, ‘required’ overtime.
4) For employees with variable weekly wage / monthly salary take the HIGHER of either the same payment in the same period last year OR the average payment of last TAX year's salary - capped at £2,500.
If not employed since 6 April 2019, then count back to start of employment from the date of furlough and take an average.
5) Holiday pay - yes employees can be on holiday and furlough at the same time! (Been outraged at this delay!)
Holiday pay must be paid at the full rate of pay, not the 80%. Use an average over the past 52 weeks for holiday pay (NOT the tax year, so it is different to furlough wage payments, confusingly).
If they haven't been employed for 52 weeks, count back to day one of employment from the date of furlough to calculate an average.
You CAN include holiday pay in the 80% claimed and top it up for employees. Or you can defer the holiday for up to 2 years.
6) You can put employees on a week's holiday (or whatever period) during furlough, with 80% covered by the grant and the Company pays the 20% top-up. Unless employees agree, you need to give twice as much notice to employees as the holiday you impose - ie 2 weeks' notice for a 1 week holiday imposed.
We didn't know until Friday night whether holidays could have interrupted the 3 week furlough period and thereby jeopardised the 80% payments. Better late than never (a construction client paying weekly wages has found this a real challenge!!) it is now clear that that risk does not apply - but I'm glad we were cautious just in case.
[I should say, I'm not really looking to build my Employment Law work as my work as a Speaker, Trainer, Executive Coach is MUCH more fun! But I can be persuaded a little probably in these challenging times!]
Find out how to calculate 80% of your employee’s wages, National Insurance Contributions and pension contributions if you've furloughed staff due to coronavirus (COVID-19).
