A significant number of small businesses in the UK do not take full advantage of HMRC-approved...
As soon as the scheme was announced, accountants and employment lawyers started asking for furlough clarifications. In particular, the rules around holiday, Maternity Leave and sick pay were not clear.
In today's article we're going to dive into some specific furlough clarifications.
For more on furlough small print, you may find our article Furlough - Legal Considerations helpful. And if you’d like more information about the financial, political and tax changes so far, check out our Coronavirus Tips. And be sure to visit our Coronavirus Update page.
Holiday While On Furlough
Staff on furlough are still employed. As such, they continue to accrue holiday allowance in the normal way. Under Working Time Regulations holiday allowance (at least up to the statutory minimum of 5.6 weeks per year) will continue to accrue.
The same rules apply for continuous service. Because the employee is still on the books, continuous employment accrues during furlough.
The rules around actually taking holiday (and what pay would result) during furlough are not clear. We recommend talking to your HR department for clarification. If you would like to speak to an employment law specialist, we would be happy to make the introduction - please get in touch.
Furlough doesn't affect the health and safety rules. If a member of staff has a baby, she MUST take, immediately following the birth, a minimum of:
- 2 weeks leave
- 4 weeks leave (if she works in a factory or workshop)
As a business owner, you can claim for enhanced maternity leave through the furlough scheme. You would reclaim SMP as usual and then claim any enhanced payments via the Coronavirus Job Retention Scheme. Currently, employers can claim:
- 92% of SMP
- 103% of SMP (if they qualify for Small Employers' Relief)
You may like to speak to a tax expert to make sure you are organising your payments in the most efficient way (while staying fully compliant).
Sick Leave & SPP
According to the government's official guidance page:
Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this. Employees who are shielding in line with public health guidance can be placed on furlough.
This would suggest that, if staff members are currently off sick, you should wait until they come off sick leave before placing them on furlough. It is not clear what the difference between "self-isolating" and "shielding in line with public health guidance" is.
Either way, it would seem that an employee would have no reason to say that they are sick. SSP is almost certain to be lower than furlough pay.
At the moment the rules around furlough and its alternatives are changing daily. We'll have more information as soon as it becomes available. Be sure to check our blog for updates and keep an eye on the HMRC Coronavirus Job Retention Scheme page.
If you'd like to discuss your options during the coronavirus crisis, please get in touch. We are staying on top of all the announcements from the government and can help you navigate this challenging time.