The updated guidance contains some additional information and clarification which will be important for employers who are placing employees on furlough and claiming a grant under the JRS.
Notice of furlough: employers must confirm in writing to an employee that they have been furloughed and a record of this communication must be kept for 5 years.
Re-hiring employees: if an employer made employees redundant or they otherwise stopped working for the employer on or after 28 February 2020, the employer can re-employ them, put them on furlough and claim for their wages through the scheme. It is now clear that employers can re-hire any employee who was on the payroll as at 28 February whether they resigned or were dismissed and whatever the reason for termination. It is for the employer to decide whether or not to re-employ.
Eligible individuals who are not employees: provided that they are paid via PAYE, a grant can be claimed for office holders (including company directors); salaried members of LLPs; agency workers (including those employed by umbrella companies); and limb (b) workers.
Sums that can be claimed: in a change to the previous guidance, “fees, commission and bonus” are no longer excluded from the sums that can be claimed, The updated guidance says that an employer can claim for any regular payments it is obliged to pay to its employees including, “wages, past overtime, fees and compulsory commission payments”. Discretionary bonus (including tips) and commission payments and non-cash payments are excluded. Minimum automatic enrolment employer pension contributions on the subsidised wage can be claimed for as can employer National Insurance contributions.
What cannot be claimed: the cost of non-monetary benefits cannot be claimed for, nor can additional National Insurance or pensions contributions where the employer chooses to top up an employee’s salary above what can be claimed from HMRC. Benefits provided through salary sacrifice schemes (including pensions contributions) that reduce an employee’s taxable pay are not to be included in the employee’s reference salary (i.e. the grant should be claimed on the post-salary sacrifice salary). As above, discretionary bonus (including tips) and commission payments and non-cash payments cannot be claimed for.
Family leave: for individuals on maternity/adoption/paternity/shared parental leave, claims can be made by the employer through the furlough scheme for enhanced earnings-related contractual pay.
Furlough period: it is now clear that employees can be taken in and out of furlough and furloughed multiple times, but each period of furlough must be for a minimum of 3 weeks.
Other work during furlough: employees are permitted to work for another employer while on furlough if this is permitted by their employment contract. This includes working for a new employer.
Holiday: The HMRC guidance does not address the issue of holiday during furlough. However, this is covered in the updated ACAS advice which confirms that employees can still request and take their holiday in the usual way while they are furloughed and that this includes taking bank holidays. It also confirms the right of employers to direct when employees take/don’t take holiday. Although their advice does explain the new rules on holiday carry forward, ACAS also suggest that employers should encourage workers and employees to take their paid holiday and that individuals should be taking holiday “throughout their holiday year”.