Furloughed Workers

[N-UPS]

I've read this full thread and I think people are missing a massive issue.

I dont care if I have to top up 20% or not.

The furlough clause as per the gov bulletin is:
If your employer cannot cover staff costs due to COVID19, they may be able to access support to continue paying part of your wage, to avoid redundancies.

I think there is a huge grey area on who can apply for this. I've read about a builder with a guy that is high risk, but orders for example.

To me there are serious questions
1/ Do you need to demonstrate that the company has not got any funds to pay staff wages to be able to access the furlough scheme
2/ Will you have to demonstrate that you would go bust if you did not lay off / furlough?
3/ If the government advice is interpreted to mean that we should be closed (as none essential) and therefore cannot dispatch orders, does that mean we can furlough staff?
4/ If someone shows signs of the illness do they complete 7 days SSP or go straight to furlough?

I don't think this is as simple as
"put some people on furlough and claim 80% later"

 

[webadvertiser]

I've read this full thread and I think people are missing a massive issue.

I dont care if I have to top up 20% or not.

The furlough clause as per the gov bulletin is:
If your employer cannot cover staff costs due to COVID19, they may be able to access support to continue paying part of your wage, to avoid redundancies.

I think there is a huge grey area on who can apply for this. I've read about a builder with a guy that is high risk, but orders for example.

To me there are serious questions
1/ Do you need to demonstrate that the company has not got any funds to pay staff wages to be able to access the furlough scheme
2/ Will you have to demonstrate that you would go bust if you did not lay off / furlough?
3/ If the government advice is interpreted to mean that we should be closed (as none essential) and therefore cannot dispatch orders, does that mean we can furlough staff?
4/ If someone shows signs of the illness do they complete 7 days SSP or go straight to furlough?

I don't think this is as simple as
"put some people on furlough and claim 80% later"

My thoughts too. I don't mind if I have to pay the 20%, but if I'm not eligible to furlough people on this scheme because i've been too profitable in the past and the Government deem that I can support people then I will just lay them off today at 5pm if I knew that.

The biggest issue for me is that I don't know when this ends. So, even if you have half a million in the bank you still don't want to take the risk of not reducing your costs in the next 3 months if there's no work to actually do in that time. It's the whole "war chest" scenario.

In our view, and we're in the sports industry, we can't see this getting anywhere near back to normal until 2021. If that's the case then all employees need to go and we need to shrink back to a family business.

For the Government, that's 4 other people then on benefits and potentially unemployed going into the next couple of years.

 

[UKSBD]

My thoughts are that for every week of uncertainty about this that's another week people are still in potentially in employment

 

[webadvertiser]

My thoughts are that for every week of uncertainty about this that's another week people are still in potentially in employment

True, Government dithering is certainly keeping my people in employment, but ultimately decisions have to be made, and soon for us.

Might keep people in work a little longer but come payroll this month a lot of employers might not want to be eating into bank balances in April with no work.

 

[N-UPS]

I found this also on the gov website under the "employer" section.

"Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis."

Different tone to the employee section which reads
"If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies."

 

[N-UPS]

OK posting my decision as it might help others

I've decided we need to finish an order that is semi important (supplier to the people who support supermarket checkout tills).

We'll do that tomorrow and re-assess.

Hopefully there will be more detail, ideally a few examples from the gov of
1/ should small companies with few staff and low risk stay open
2/ how does the furlough rule apply to companies who are not in immediate danger of going bust.

 

[N-UPS]

"HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month."

Per worker or per employer?
I think Rishi said per worker on the radio?

 

[ADW]

"HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month."

Per worker or per employer?
I think Rishi said per worker on the radio?

It is per worker/employee. Just had my accountant email stating their concern on companies with healthy balance sheets and substantial profits recorded on last accounts. It is a leap of faith really.

 

[webadvertiser]

It is per worker/employee. Just had my accountant email stating their concern on companies with healthy balance sheets and substantial profits recorded on last accounts. It is a leap of faith really.

That would answer the problem for me. If I can terminate an employee's contract before 2 years without giving them any reason at all (or just telling them we're not making money because of coronavirus) vs having to justify to the Government my lack of profitability in order to effectively keep an employee on state benefits, as a business the simpler option is just terminate contracts.

 

[N-UPS]

OK so I think we're heading towards the thinking that
if your company is healthy, we are going to pay the furlough

Now the 80% figure raises its head.
Its probably too high, as web-advertiser above will just terminate.
Secondly if you have some furloughed and others working for only a 20% additional earnings, it creates a fairness problem.

I'm actually OK to help pay through this bad period.
I have spent a half day trying to work this out.

Gov could have said
Stay at home
Everyone gets £250 per week
if your employer paid a CT bill of less than <£3K per employee last year then the government will cover this.

Bingo no stress sorted

8 Billion cost a week (presuming gov pays all, would be less if using my CT<£3K rule)
Covid emergency package for businesses 350 Bn£
or almost 43 weeks at my numbers level.

Where has the money gone?

 

[ADW]

OK so I think we're heading towards the thinking that
if your company is healthy, we are going to pay the furlough

Now the 80% figure raises its head.
Its probably too high, as web-advertiser above will just terminate.
Secondly if you have some furloughed and others working for only a 20% additional earnings, it creates a fairness problem.

That part about profit was more a concern rather than fact. Still guess work going on here until facts are laid out. It is a step into the dark.

There are certainly workers that are loving the thought of 80% for no work. I have seen most of mine are ready to work as needed for the good of the company but a smaller number after an easy time.

 

[Newchodge]

The only official statment on this states "All employers are eligible". The only criterion is that employees are furloughed because of coronovirus. Everything else is supposition but if every employer is eligible profitability does not come into it.

If you furlough staff you have a written agreement with them. I can see absolutely no reason why that agreement cannot state that the 80% payment is dependent on the employer being able to recover it from the government.

The exposure, for ex-very profitable firms, would then be only up to 2 months maximum - the system is supposed to be in place by end of April, and payment can only start from 1 March, so the specific regulations must be known in that timeframe.

The agreement can include the right for the employer to recover from the employee any 80% payment that they cannot recover from the government, but realistically the right to recover will not amount to the ability to recover!

 

[Newchodge]

will HMRC use the PAYE figures that are put on the system (presumably). Son has a good salary but low compared to his gross pay due to being a very high commission earner. Don't get me wrong, he and his partner can pay their mortgage and live ok on 2 x £2500 a month but this is about 40% of their normal income.

I would be very surprised if commiccion does not go through PAYE. If it doesn't the employer has been acting in a way that may be deeemed to be inappropriate.

 

[webadvertiser]

That part about profit was more a concern rather than fact. Still guess work going on here until facts are laid out. It is a step into the dark.

There are certainly workers that are loving the thought of 80% for no work. I have seen most of mine are ready to work as needed for the good of the company but a smaller number after an easy time.

Most of ours are looking for an easy time as friends and colleagues look for the Government bailout. Sad really, but in these times you get to know which employees have any sort of motivation and dedication to your company.

They're probably not going to see a bigger crisis in their lifetimes, yet they're happy to sit at home in the garden in the sun on an extended summer holiday.

 

[webadvertiser]

The only official statment on this states "All employers are eligible". The only criterion is that employees are furloughed because of coronovirus. Everything else is supposition but if every employer is eligible profitability does not come into it.

If you furlough staff you have a written agreement with them. I can see absolutely no reason why that agreement cannot state that the 80% payment is dependent on the employer being able to recover it from the government.

The exposure, for ex-very profitable firms, would then be only up to 2 months maximum - the system is supposed to be in place by end of April, and payment can only start from 1 March, so the specific regulations must be known in that timeframe.

The agreement can include the right for the employer to recover from the employee any 80% payment that they cannot recover from the government, but realistically the right to recover will not amount to the ability to recover!

Interesting. I was more under the impression that we'd hear what the details were next week when they finalise the deal for self-employed people too. I can't see many employers blindly furloughing if they have to wait until the end of the 3 month period to confirm that they're going to qualify to get paid back.

I don't mind waiting for the payment, but I do need to know if I'm going to qualify, and be legally correct with my employees so to avoid any comeback from this.

 

[Newchodge]

Interesting. I was more under the impression that we'd hear what the details were next week when they finalise the deal for self-employed people too. I can't see many employers blindly furloughing if they have to wait until the end of the 3 month period to confirm that they're going to qualify to get paid back.

I don't mind waiting for the payment, but I do need to know if I'm going to qualify, and be legally correct with my employees so to avoid any comeback from this.

There is no 3 month period (except the availability of the scheme which will then be reviewed). No one could be furloughed earlier than with effect from 1 March and the whole reclaim system is supposed to be in place by end April.

 

[UKSBD]

I don't mind waiting for the payment, but I do need to know if I'm going to qualify, and be legally correct with my employees so to avoid any comeback from this.

We still don't know what the payment will be.

Some still think the Government will make an 80% contribution of your wage bill.

I.e
You have to pay out £1000 to then get £800 of it back

 

[Bluejen84]

in these times you get to know which employees have any sort of motivation and dedication to your company

Yes I have one lonely manager who's spent all week in my Soft play alone painting!

 

[Mr D]

Just had a query locally.

If someone is advised to isolate for 3 months (yeah, right its just going to be 3 months) and get SSP - can they instead ask to go on furlough?

 

[Newchodge]

Just had a query locally.

If someone is advised to isolate for 3 months (yeah, right its just going to be 3 months) and get SSP - can they instead ask to go on furlough?

No. They are not at work for medical reasons, so SSP or compny sick pay. Their employer has not asked them to stay away from work because there is no work for them available, as an alternative to redundancy.

 

[Mr D]

No. They are not at work for medical reasons, so SSP or compny sick pay. Their employer has not asked them to stay away from work because there is no work for them available, as an alternative to redundancy.

Thanks.
Another person to pay the mortgage on SSP...

 

[Newchodge]

Thanks.
Another person to pay the mortgage on SSP...

They may be able to get additional state benefit help. But state benefit help has not been enough for people to live on for a number of years.

 

[Mr D]

They may be able to get additional state benefit help. But state benefit help has not been enough for people to live on for a number of years.

That despite people living on state benefit alone?
Quite a lot of people. Millions?

 

[qqcs]

I just read the whole topic and sounds joke to me. Companies who can not pay workers need to pay workers to get 80% back?? Or even they have to pay PAYE before they can claim back. Looks like this is cleaning weak companies and gather custumers to banks. The last row of 80% paragraph on HMRC website: "f your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan."

 

[UKSBD]

I just read the whole topic and sounds joke to me. Companies who can not pay workers need to pay workers to get 80% back??

Nobody knows yet

Some people think the Government are going to be paying the employee 80% of their wages.

Some think the Government will expect employers to pay the employee 80% of their wages and will then reimburse the employer for this.

Others think the Government are going to be paying the employer 80% of what they pay their employee.


We shall hopefully know soon.

 

[Mr D]

I just read the whole topic and sounds joke to me. Companies who can not pay workers need to pay workers to get 80% back?? Or even they have to pay PAYE before they can claim back. Looks like this is cleaning weak companies and gather custumers to banks. The last row of 80% paragraph on HMRC website: "f your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan."

I think the government envisaged those companies able to pay staff to carry on paying them in order to claim money back.
If not able to survive to get the grant or get a loan then of course the solution is redundancy - which could be more expensive for the business if it has long service staff.
Or business goes under.

Some as you say cannot pay workers.

 

[KPEDIN]

Couple of questions apologies if already answered earlier on in thread

Can companies put you on a furlough where they say OK dont need you for 3 days of the week but come in for 2? how does that work. Or once furloughed thats you off for a specific time eg 1 month


If they dont pay you the 20% are they still obliged to pay you it at a later date or if you agree to a furlough condition - bascially accepting a 20% pay cut if employer wont make up the differnce

Can they refuse to let you get a part time job outside your contracted hours to make up the difference

 

[Mr D]

Couple of questions apologies if already answered earlier on in thread

Can companies put you on a furlough where they say OK dont need you for 3 days of the week but come in for 2? how does that work. Or once furloughed thats you off for a specific time eg 1 month


If they dont pay you the 20% are they still obliged to pay you it at a later date or if you agree to a furlough condition - bascially accepting a 20% pay cut if employer wont make up the differnce

Can they refuse to let you get a part time job outside your contracted hours to make up the difference

Not sure about all that.

Some employees apparently would prefer a pay cut down to 80% in return for doing nothing for 3 months. Disadvantage in firms where some are on furlough at 80% and some are working a 40 hour week plus paying to get to work in return for the extra 20% (ie normal pay).

 

[Awinner2]

I would be very surprised if commiccion does not go through PAYE. If it doesn't the employer has been acting in a way that may be deeemed to be inappropriate.

What I meant is that it all goes through PAYE but commission is a large percentage of the total.

 

[KPEDIN]

Not sure about all that.

Some employees apparently would prefer a pay cut down to 80% in return for doing nothing for 3 months. Disadvantage in firms where some are on furlough at 80% and some are working a 40 hour week plus paying to get to work in return for the extra 20% (ie normal pay).

Hi Thats whats Im confused about I work in a team of 4 in the transport industry where we are expected to be on call 1 night a week and then 1 in every 4 weekends. They have said they will try and keep us all full time but if not furlough some of us and then call us back for a day or two when required. My reading of it is once your on furlough thats it otherwise what they are doing is putting us on a zero hours style contract

 

[ADW]

Couple of questions apologies if already answered earlier on in thread

Can companies put you on a furlough where they say OK dont need you for 3 days of the week but come in for 2? how does that work. Or once furloughed thats you off for a specific time eg 1 month


If they dont pay you the 20% are they still obliged to pay you it at a later date or if you agree to a furlough condition - bascially accepting a 20% pay cut if employer wont make up the differnce

Can they refuse to let you get a part time job outside your contracted hours to make up the difference

You can't work at all during furlough. If you work 1 day a week for the next month in theory that is all you should get paid from employer. If you don't work any days and are furloughed for the next month you can get 80% of your wage and the other 20% is at the discretion of your employer so not guaranteed in any way.

 

[qqcs]

I think the government envisaged those companies able to pay staff to carry on paying them in order to claim money back.
If not able to survive to get the grant or get a loan then of course the solution is redundancy - which could be more expensive for the business if it has long service staff.
Or business goes under.
Some as you say cannot pay workers.

My first thought was this scheme is to save small companies from insolvency, but looks like this is just helping companies who doesnt need help.
Our enquiries orders stopped weeks before the lockdown. We dont have hundreds of thousands in bank. We facing insolvency if these scheme doesnt apply to us. I dont want to to give more personal security for interuption loan that I have alredy gave it to the bank overdraft. Nobody knows how economy survive. In case of insolvency this will cost more to the goverment than the scheme.

 

[Newchodge]

What I meant is that it all goes through PAYE but commission is a large percentage of the total.

We still don't have the details, but if commission is PAYE income, it should be included.

 

[Mr D]

My first thought was this scheme is to save small companies from insolvency, but looks like this is just helping companies who doesnt need help.
Our enquiries orders stopped weeks before the lockdown. We dont have hundreds of thousands in bank. We facing insolvency if these scheme doesnt apply to us. I dont want to to give more personal security for interuption loan that I have alredy gave it to the bank overdraft. Nobody knows how economy survive. In case of insolvency this will cost more to the goverment than the scheme.

Not so much helping companies now as helping them in the summer.
Those that would have to sack all the staff - who then claim benefits - then try and recruit staff later on when restrictions lifted - chances of getting all your staff back not great.
This allows staff to keep employed, saves them joining the half million new universal credit claims - and merely costs your kids and grandkids money.

Avoiding insolvency - there is the council grant, the lack of business rates next financial year and the business loan scheme.

Some will be unable to avoid insolvency. Not a lot government can do to keep businesses afloat.

 

[qqcs]

Not so much helping companies now as helping them in the summer.
Those that would have to sack all the staff - who then claim benefits - then try and recruit staff later on when restrictions lifted - chances of getting all your staff back not great.
This allows staff to keep employed, saves them joining the half million new universal credit claims - and merely costs your kids and grandkids money.
Avoiding insolvency - there is the council grant, the lack of business rates next financial year and the business loan scheme.
Some will be unable to avoid insolvency. Not a lot government can do to keep businesses afloat.

If the payroll 20k, 10k grant wont help. We are also not in those sectors. Universal credit is nothing compared to the stautory redundancy, unpaid salary, salary for notice period, holidays, etc which is the responsibility of the goverment in case of insolvency.

 

[Newchodge]

If the payroll 20k, 10k grant wont help. We are also not in those sectors. Universal credit is nothing compared to the stautory redundancy, unpaid salary, salary for notice period, holidays, etc which is the responsibility of the goverment in case of insolvency.

If the payroll is 20k and you have no work you furlough your employees and your payroll billis either 0 or 4k. Most companies pay monthly and should have had March payroll covered anyway, if not the banks should agree an overdraft. the furlough scheme is supposed to be running by end April. I don't understand your comments.

 

[Mr D]

If the payroll 20k, 10k grant wont help. We are also not in those sectors. Universal credit is nothing compared to the stautory redundancy, unpaid salary, salary for notice period, holidays, etc which is the responsibility of the goverment in case of insolvency.

Universal credit could end up being paid out before statutory redundancy if the insolvency service get well behind.

Business becomes insolvent then has to go through formal insolvency for them to claim from government.
Business able to afford the few grand to do that or else have sufficient realisable assets to cover insolvency practitioner fees?
If not then no help for staff except benefits.

 

[ADW]

If the payroll 20k, 10k grant wont help. We are also not in those sectors. Universal credit is nothing compared to the stautory redundancy, unpaid salary, salary for notice period, holidays, etc which is the responsibility of the goverment in case of insolvency.

There is also the vat deferral which is there to help immediately until the furlough payment might be ready...... which does seem like it would work for you.

 

[spp19]

Do we know when the refunds will start to hit the accounts?

I can't see how businesses that pay weekly can continue to do so until the end of April if income is zero (pubs, restaurants etc). All very well saying keep paying the staff ready for the upsurge but if the cash isn't there they just aren't going to get paid.

 

[Newchodge]

Do we know when the refunds will start to hit the accounts?

I can't see how businesses that pay weekly can continue to do so until the end of April if income is zero (pubs, restaurants etc). All very well saying keep paying the staff ready for the upsurge but if the cash isn't there they just aren't going to get paid.

The regulations have not even been issued yet. The statement at the beginning was end of April. Businesses who cannot afford 80% of payroll until then should ask their banks for assistance.