The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).
Employers can claim for 80% of furloughed employee's usual monthly wage costs (up to £2,500 a month) plus associated Employer NICs and minimum automatic enrolment employer pension contributions on that wage.
The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 19 March 2020.
We recommend fully familiarising yourself with HMRC's comprehensive Coronavirus Job Retention Scheme guidance, which can be accessed here
20-21 BrightPay provides functionality to calculate and apply furlough pay to an employee's payslip.
Brightpay will now assist you in working out how much to pay your employee:
Employers operating the Coronavirus Job Retention Scheme must, at a minimum, pay their employee the lower of 80% of their regular wage or £2,500 per month. An employer, if in a position to do so, can also choose to top up an employee’s salary beyond this, but is not obliged to under the scheme.
Based on your selection, BrightPay will now ascertain the amounts to apply to the employee's payslip, as per the example below:
Your employee's payslip will now be automatically updated with the applicable pay items:
Employers will need to make a claim for their wage costs through a HMRC online portal.
This portal will become available to use from Monday 20th April 2020.
HMRC have published a simple step by step guide for employers on how to make a claim which can be accessed here .
Changing the status of employees to a furloughed worker remains subject to existing employment law. Generally, where an employee’s contract contains a layoff or short term clause employers should be able to place employees on furlough leave. Where there is no such clause, it is best advised to get agreement from the employee.
Additionally, a 20% reduction in salary will be a change in terms and conditions of employment. Where employers are not topping up the government payment, they should also seek agreement from the employee.
Given the current situation and the alternatives for those employees should they not agree, one can expect that most employees will agree. That said, prudent employers will seek to get their employees agreement as part of their furlough leave process.
Template letter to employees being place on furlough leave..
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