Furloughed Workers

Discussion in 'COVID-19 Forum' started by CBJROMS, Mar 21, 2020.

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  1. CBJROMS

    CBJROMS UKBF Regular Free Member

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    HMRC is set to reimburse 80% of furoughed workers wage costs up to £2500. This implies, to me, that the employer will be required to contribute 20%.

    Although our sales have dropped off a cliff this week, we do not want to send everyone home and have a plan for a skeleton staff to work short weeks to keep things going (eg making sure our invoices are paid and paying suppliers) and getting oursleves ready for when things start to get back to normal.

    Looking on the Internet a 'furloughed worker' is not able to do any work at all - even answering a call or sending an email breaches their status. On one hand I assume that HMRC wil rigidly apply this definition, on the other hand it wouldnt seem unreasonable for an employer to expect a pro-rata (eg 20%) amount of efffort from a 'furoughed worker'. In our case, there will be very little revenue earning work to be done but some customers may still want our support and my team want something to do.

    I understand that this legislation has been rushed through and applaud the government for taking this step. I just want to make sure that my understanding of the rules is correct so that I can make the correct decision for my business and its employees.
     
    Posted: Mar 21, 2020 By: CBJROMS Member since: May 31, 2008
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  2. UKSBD

    UKSBD Not a real duck Staff Member

    9,820 1,875
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  3. UKSBD

    UKSBD Not a real duck Staff Member

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    @Newchodge have you seen this yet, do you think we are interpreting it correctly?
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  4. UKSBD

    UKSBD Not a real duck Staff Member

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    Just to add
    When I said be disappointed I think that's a massive understatement

    If our interpretation is correct, this is going to be a real shocker for those who were thinking the Government were simply going to be paying the 80%
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  5. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    I took to be staff who couldn’t come in, but were unable to work from home. A hotel receptionist for example.
     
    Posted: Mar 21, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
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  6. UKSBD

    UKSBD Not a real duck Staff Member

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    Have you read the link above, it seems to imply what we think.
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  7. UKSBD

    UKSBD Not a real duck Staff Member

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    Hell of a lot of businesses are going to be totally Peed Off by this, plus employees when the employers don't take up the offer.

    Watch the Governments popularity bomb when the realisation kicks in.
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  8. UKSBD

    UKSBD Not a real duck Staff Member

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    Hope I'm wrong about the 20%
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  9. lesliedocherty

    lesliedocherty UKBF Ace Free Member

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    I read it as the government pay 80%, the employer can if he chooses to, pay the other 20%

    "Your employer could choose to fund the differences between this payment and your salary, but does not have to."
     
    Posted: Mar 21, 2020 By: lesliedocherty Member since: Jun 17, 2006
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  10. UKSBD

    UKSBD Not a real duck Staff Member

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    hope so, but could mean above £2,500
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  11. UKSBD

    UKSBD Not a real duck Staff Member

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    "How to access the scheme
    You will need to:
    • designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
    • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
    HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers."

    That still reads to me that you have to say how much you've paid them, and can then claim 80% of it back.
    Guess we will just have to wait and see
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  12. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    Yes I think I thought this was one of the other threads about this subject. Sorry.
     
    Posted: Mar 21, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
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  13. UKSBD

    UKSBD Not a real duck Staff Member

    9,820 1,875
    It's getting confusing with all the threads all over the place, mods are having discussions on how to simplify this (grouping posts together more)
     
    Posted: Mar 21, 2020 By: UKSBD Member since: Dec 30, 2005
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  14. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    That would be nice...
     
    Posted: Mar 21, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
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  15. JB89

    JB89 UKBF Newcomer Free Member

    7 3
    I'm currently an employee that has had hours reduced significantly, initially I thought myself and anyone in this situation would be included in the governments plans above as it was being backdated to 1st March, i.e. if I earned £1000 a week then and now down to £600, the government would offer to pay £800 (80%) with my employer having the chance to pay the remainder.

    After reading the above it looks like we cannot be doing any work to be eligible. Seems ridiculous as I'm going to be earning less for still trying to provide a service a couple of days a week than I would if I was sat at home watching Netflix in my dressing gown all week!

    FWIW I think I'd go bonkers doing the latter so probably won't be asking if my employer will consider shutting the doors!
     
    Posted: Mar 21, 2020 By: JB89 Member since: Jan 16, 2020
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  16. Mr D

    Mr D UKBF Legend Free Member

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    Well you could subscribe to the Mouse Channel next week.

    Some people are focusing on their gardens, on their hobbies, on helping others while enforced away from work.

    Beats spending the day in the jobcentre.
     
    Posted: Mar 21, 2020 By: Mr D Member since: Feb 12, 2017
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  17. JamieM

    JamieM UKBF Ace Free Member

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    That’s how Rishi Sunak explained it on the announcement. Employers can make up the 20% if they choose to.
     
    Posted: Mar 21, 2020 By: JamieM Member since: Mar 22, 2006
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  18. Newchodge

    Newchodge UKBF Big Shot Free Member

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    First, this is only for employees who the employer would have laid off (if in their contracts or by staff agreement) or made redundant due to CV. It was made clear in the presentation, although not in the guidance, that the government would pay the employer 80% (of what is not yet clear) and the employer could chose to add from 0 up to 20% so the employee gets 80% at least of their 'normal pay' (whatever that is). The employer cannot work for the employer while receiving this. It is not a lifeline to keep businesses going if they have less business. It is a lifeline to prevent millions of people having to claim benefits when they are all made redundant at the same time.

    Apparently the theory is that, in 3 months everything will be getting back to normal and businesses will still have the staff available to restart.

    There are lots of bits missing - will employers have to pay employers' NI and pension contributions? Will minimum wage increases kick in and increase the employee's pay? What is the baseline that 80% is calculated from?

    Like many announcements it sounds good until you start working out how it works, then it changes, possibly substantially.

    For instance what if the employer decides not to bother? What if only half the workforce is going off - how do you select? etc etc
     
    Posted: Mar 22, 2020 By: Newchodge Member since: Nov 8, 2012
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  19. ADW

    ADW UKBF Enthusiast Free Member

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    Not sure why some thought this could be used for employees who are working. You would have Tesco making a fortune and slashing their wage bill. If employers have work for their staff then that would assume they are able to function as a business. However, I think there is some clarity needed on the middle ground. Where work has been substantially reduced and hours cut by half for example, is there access for 80% funding against the dropped hours. Is it all or nothing on help?
     
    Posted: Mar 22, 2020 By: ADW Member since: Oct 25, 2007
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  20. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    I think that’s where they hope one of the other measures mentioned will be useful. Rates relief, EFG loan etc
     
    Posted: Mar 22, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #20
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