FURLOUGHED WORKERS – AN UPDATE

The Government has provided updated guidance on furloughed workers which has helped clarify some issues. Below is a summary of the important issues:

  1. What can employers claim for in relation to wages?

Employers can apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

Employees will pay tax on the 80% or £2500.

  1. Can employees who are furloughed work for a different employer?

Previously this was unclear, but it has now been clarified. Employees who have been furloughed are able to gain new employment whilst on furlough. This means that they can receive their 80% wage up to £2500 and still get a new job. Their new employer will have to ensure that they complete the starter checklist for PAYE correctly to reflect the fact that the employee is furloughed.

The employee’s employment contract may, however, prohibit working for another employer whilst employed and therefore if the employee takes on new employment without the employer’s consent, they will be in breach of their employment contract and could face disciplinary action which can include dismissal. In these circumstances it is for the employer to decide whether to grant the employee consent to work elsewhere.

  1. Can I rehire staff who left after 28th February 2020?

The guidance states that if you made staff redundant after 28th February 2020 you can rehire them and place them on furlough. It also now states that if an employee left employment after 28th February 2020 you can rehire them and place them on furlough.

If you wish to discuss the above article, or require further clarification on the matter, please contact our employment department at the following email addresses:

John McShane –           john.mcshane@mtb-law.co.uk
 
Judy Hamilton –           judyh@mtb-law.co.uk