Through the Coronavirus Job Retention Scheme (CJRS), the government commits to cover 80% of the wages of ‘furloughed workers,’ up to £2,500 per month. You can find out more about the scheme itself here.
In case you have to make the difficult decision of furloughing members of your team, we wanted to better understand from an employment law perspective how to furlough a member of your team, so we spoke to HR expert Samatha Wilkins from Vibrant HR, who gave us this six-step process:
Speak to your team and communicate that you are looking to furlough them and why.
See if anyone would like to volunteer for furlough. Note that no one can insist on being furloughed. Use a fair selection process to agree on who to furlough (as you would with redundancies). At this stage, decide if you are going to offer to ‘top-up’ the government grant of 80% or £2,500 to 100% of the furloughed employee’s salary. At Wow, we can help you with calculations and work out how much you will pay and recoup in different scenarios.
Once you’ve decided who to furlough, give them an ‘agreement to furlough’ letter that they sign to agree to be furloughed. You can’t force someone to be furloughed against their will, so you need their written consent. In reality, it’s unlikely that anyone would not consent to furlough when the alternative is redundancy.
Once you have signed agreement, give the ‘confirmation of furlough’ letter to affected employees, with a start date for their furlough period. Remember, the employee cannot undertake any income-generating tasks for the business during their furlough.
Notify your payroll provider and HMRC of who is being furloughed, from which date and if you are topping up any salaries. If we do your payroll at Wow, we can take care of this for you.
Finally, keep communication channels open with your furloughed team member. This will likely be a worrying time for them and you may need them back at short notice when business picks up again. Note: You can find and use both the ‘agreement to furlough’ letter and the ‘confirmation of furlough’ letter here.
We hope you find this guide useful. You should still get HR advice for your own situation but hopefully, you now have a better understanding of what the process entails. If you are a Wow client, you have access to our free HR helpline. If you need the details, please let us know. If you have any questions, please do not hesitate to contact Wow or Sam at Vibrant HR.