Citizens Advice Honiton explains important changes to furlough and what employers should do

Citizens Advice Honiton has reminded employers that they need to apply to the Coronavirus Job Retention Scheme, and warned that changes in the guidance from Government could leave some employers ineligible to claim unless they take action.

The scheme was opened to employers at 5.30am on 20 April, with more than 140,000 applying to the fund in the first day.

The scheme is designed to support businesses that have been forced to halt their operations due to the lockdown currently in place to help slow the spread of Covid-19.

Chief Officer at Citizens Advice East Devon, Tim Bridger explained: "The Coronavirus Job Retention Scheme was set up to protect your job if your place of work has been shut down.

"It will allow your employer to pay you whist there is no work to do. This is known as furlough.

"To be entitled to the payments you must have been employed on 19 March 2020 and be paid through the Pay as You Earn Scheme.

"You can be furloughed if you were a casual worker, on temporary contract, zero hours contract, agency worker or an apprentice.

"If you stopped working on or after 28 February 2020 you might still be able to be paid if your employer rehires you."

Tim added however that the guidance on what is required for employers to be recognised as 'furloughed' was revised just before the scheme went live.

The rules now state that HMRC will only recognise furlough as valid if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment.

This means that it is not enough for the employer to notify the employee that they are furloughed; it needs to be written down that the employee will cease all work.

In order to ensure that their workers are eligible for the payments, all employers should either write to or email the employees that they will be claiming for under the scheme.

They should include the date that the employee ceased working, and that they expect to re-start their role once the lockdown has ended.

Whilst there needs to be a written record, the employee does not need to provide a written response. This written record must be retained for a five-year period.

Under the scheme, employers can apply for a grant that covers 80% of their usual monthly wage costs, up to a maximum of £2,500 a month per employee, plus the associated Employer National Insurance contributions and pension contribution.

Some employers are choosing to top this up to full pay. This scheme will continue to run until employees can return to work, or until the scheme ends on 30, June 2020.

The Government will work out each employee's normal pay before tax – this will be without any bonus or commissions. You will pay tax and national insurance and any pension contributions. If this leaves you below minimum wage that is legal because you are not working.

If your pay varies then they will pay you the higher of the amount you earned in the same month last year or the average of your monthly earnings last year - if you have been working longer then you will be paid for an average of your monthly earnings since you started employment.

Benefits Expert at Citizens Advice Honiton, Sheran Taylor explained: "The lower level of income available to you might mean that you become eligible for some benefits.

"If you find that you are short of money each month due to being furloughed, it's a good idea to have a benefits check.

"We can carry out benefits checks for you over the phone, so contact us and leave your details and we will ring you back."

There are additional protections in place for people who have been self-isolating or were on sick leave at the start of the lock-down period.

Sheran added: "If you are on sick leave because you are self-isolating you should be in receipt of Statutory Sick Pay.

"However your employer can still furlough you, and if they do you will be eligible for the 80% grant rather than for Statutory Sick Pay.

"If you are shielding or required to stay at home speak to your employer about whether they can or plan to put you on furlough. Your employees can furlough you in this situation even if the business isn't shutting down."

People who work for more than one employer can receive money under the scheme from each employer.

It is also permissible to work for someone else whilst on furlough if your contract says that is okay, and doing so would not affect your furlough money.

But if you do get a new job you should make sure you can go back to work for your original employer when it's over. You can also volunteer.

Tim stressed that it was vital for employers to send a written record to all their employees, so that they would be able to reclaim any wages paid out in April and be eligible to receive the grant on an ongoing basis.

He said: "Your employer will send you a letter or email explaining that you will be paid, and that you must cease all work for them whilst this is happening. If you haven't heard anything, contact them and ask for confirmation in writing."

Citizens Advice has information about how furlough works, and the dos and don'ts of the scheme.

It is all available on the website - citizensadvice.org.uk. You can also contact Citizens Advice East Devon via email on [email protected] or leave you details for an advisor to call you back, by ringing 01404 42227.