The Coronavirus Job Retention Scheme portal which allows employers to reclaim up to 80% of a furloughed employee’s salary from HMRC went live today. The portal can be accessed through the Government Gateway.
In the final direction on the operation of the scheme, the Treasury snuck in the requirement that employers need to have their employees’ written agreement “that the employee will cease all work in relation to their employment.”
That means that you have to have the employee’s written to be furloughed. You cannot simply rely on the fact that they have agreed verbally not to come to work.
Since the furlough scheme was introduced last month, the questions I’m routinely asked are all in relation to annual leave while employees are on furlough. Can my employees take annual leave while they are on furlough? If they can take annual leave, then do I have to top up 20% of their salary for the annual leave days?
The question has still not been definitively answered. However, on Friday evening HMRC updated the Employee Guidance (note, not the Employer Guidance) to confirm that it is possible for employees to take annual leave while on furlough, and employers will have to top up to 100% of normal pay. This means that if your employees ask to take annual leave during furlough then they can.
However, the guidance though is still silent on whether or not employers can force employees to take annual leave during furlough and still reclaim 80% under the scheme. There are differing schools of thought on that. Some people are saying yes you can, others are saying it’s a definite no.
Ordinarily, as an employer you are entitled to set out the dates upon which you employees are required to take holidays provided that they get as notice double the period of annual leave days. So that would mean that for one week’s annual leave, then you would have to give two weeks’ notice of that and the employees would have to agree to that.
The human element of that though is that because of lockdown then other than the fact that employees will get 100% of their salary, then there is no incentive for your employees to take their annual leave as they can’t go anywhere because of the restrictions so until there is clearer guidance on this, then are your employees going to agree to that? Put yourself in their shoes, would you agree to it knowing that you could carry the annual leave over and you could use the leave post restrictions?
The employee guidance does however state that HMRC is keeping the “policy” on holiday pay during furlough under review and we may very quickly get updated guidance on that.
In the meantime though, if this is something you are considering doing then please contact us and we can discuss your own business’ situation with you.