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Updated guidance on furloughing staff covers payments on return from parental leave, IR35 and TUPE.
The Government has updated guidance on its Coronavirus Job Retention Scheme relating to return from statutory leave, IR35, TUPE and employees of multiple employers.
The updated guidance says those returning from statutory leave [including maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave] after 28th February should have their grant calculated based on their salary before tax, not the pay they received on statutory leave. If pay fluctuates, the grant should be based on either the same month’s earning from the previous year or average monthly earnings for the 2019-2020 tax year. It has also been confirmed that employers can claim for enhanced maternity pay through the furlough scheme, suggesting that employers can furlough employees on maternity leave.
For employees who have had several different employers over the past year and are being furloughed by their current employer, the guidance clarifies that they cannot be furloughed by any previous employer. For employees who have been TUPE’d after the 28th February, the new employer is eligible to claim under the scheme if they wish to furlough staff.
For contractors operating under IR35 in the public sector, the guidance says public sector bodies will follow the Crown Commercial Services guidance in the vast majority of cases. However, in a minority of cases, for instance, where organisations are not primarily funded by the government and their staff cannot be redeployed to assist with the coronavirus response, the guidance says contractors who are deemed employees according to IR35 can be eligible for this scheme. This has to be agreed with the contractor’s Personal Service Company (PSC) and the fee-payer. The contractor would then not be able to work for the public sector organisation during their period of furlough. The fee-payer would be able to apply for the furlough payment of 80% of the monthly contract value, up to a maximum of £2,500, as well as the employer National Insurance contributions on that subsidised wage.
Where a contractor is continuing to receive payments from a public sector client [including through the job retention scheme], income from this client should be excluded from any calculation regarding the job retention scheme if the contractor also decides to furlough themselves as an employee or director of their own company.
The British Chambers of Commerce (BCC) says that UK businesses are desperate for the government to launch its furlough scheme in time for this month’s payrolls. A survey by the organisation found that two-thirds of its members had furloughed staff in advance of the job retention scheme. More than half of the firms surveyed had only three months’ cash reserves or less. The Government has said the scheme will be up and running by 20th April and that people will be paid within four to six days of their claim being submitted.