Josie Malone Recruitment, candidate, covid-19...
As the Government has implemented stricter measures to prevent the spread of the coronavirus COVID-19 pandemic, what impact does this have on workers across the UK? TXM Recruit looks at how the Government is supporting Clients and Candidates directly impacted by COVID-19.
Before the Government announced a lock down across the country, Prime Minister Boris Johnson urged businesses to stand by their employees as he believes the UK will be able to ‘turn the tide’ within the next 12 weeks. To support many businesses impacted by COVID-19, the Government launched a Coronavirus Job Retention Scheme, offering employers temporary financial aid for those who are unable to work. For most businesses who have closed, remote working isn’t an option for all employees.
By placing employees on furlough (employees on a leave of absence) rather than making redundancies, employees can claim 80% of their monthly salary up to £2,500. According to the Government’s guidance, this also includes associated Employer National Insurance and minimum automatic enrolment employer pension contributions on that wage.
What does furlough mean for UK workers?
Many UK businesses are eligible for the temporary scheme so long as their employees are on a PAYE payroll scheme from 28 February 2020. This includes full-time and part-time employees as well as those on a PAYE agency contract. Being put on furlough means employees are unable to work for the business they’re employed by for a minimum of three weeks and can be placed on this scheme for at least three months. The employment status of those impacted by COVID-19 can be reviewed at any time.
Can I work whilst on furlough?
Those placed on furlough can’t work for the same employer, however you can work for another company if your employment contract allows you to do so. We’d advise you to speak with your employer directly about this.
Furloughed employees can volunteer and participate in training so long as it doesn’t generate any revenue for the business. HMRC is expected to carry out stringent audits to confirm that companies who have received the reimbursement have not abused the scheme, i.e. have employees continue work during this period. If HMRC finds this to be the case, they reserve the right to retrospectively request the money back if they have already paid this out.
Who qualifies for furlough?
If you’re on a PAYE agency contract and are unable to carry on with your usual work duties, you may be placed on the Job Retention Scheme, which will enable you to continue to receive 80% of your monthly wage, up to a limit of £2500. Whether you’re working via an agency, umbrella company or on a fixed term contract, if you have agreed to be furloughed with your employer, they will change your employment status and put through your application for this scheme. Workers who are self-isolating or on sick leave will receive Statutory Sick Pay.
If you’re an Umbrella worker, you are eligible for the Job Retention Scheme however this is based upon the National Minimum Wage excluding any bonuses or commission you would usually receive. This is currently being challenged by many Umbrella companies as unfair and we believe this may change.
If you’re a Limited Company Contractor and pay yourself a salary and dividends through your own company, you will be able to apply for the Job Retention Scheme if operating PAYE schemes where you can furlough yourself.
If I’m self-employed, do I qualify for the Job Retention Scheme?
If you’re self-employed, the Government has now implemented a Self-Employed Income Support Scheme which allows you to claim 80% of your average profit (up to £50,000) over the last three years up to a limit of £2,500 per month. This will be in place for the next three months and may be extended if needed. The scheme isn’t live yet so we’d advise you to speak with your accountant who will be able to guide you further on this.
How long will the Government take to pay the furlough grant to businesses that apply for it?
Many employers will be expecting a large cash impact to pay out wages before the furlough reimbursement is then received from HMRC. The scheme portal hasn’t been finalised by HMRC so once it’s up and running, companies will then be required to submit information to receive the money back.
For those on the Coronavirus Job Retention Scheme, the Government has suggested grants will be issued by the end of April, whereas if you’re applying for the Self-Employed Income Support Scheme, payments will be likely backdated and paid out in June.
How can TXM Recruit help you right now?
If you need further guidance on your current employment status, please look at the official GOV.UK website.
If you need support from TXM Recruit or have any questions on your current situation, you can contact our team of consultants here. Alternatively, please check out our COVID-19 Support Hub for more useful resources.