Covid-19 Furlough Information

Wage Subsidy Arrangements

Where employers lay staff off, all employers will be able to claim a grant of up to 80% of an employee’s pay up to a limit of £2,500 per month. That can be backdated to 1 March.

To use that scheme you will need to designate affected employees as ‘furloughed workers,’ and notify your employees of this change.  Although the language is new, that is the same as laying employees off. You can do that if you have the right to do so under the contract or, if not, with the agreement of the employees. Clearly this new scheme will make it much easier to obtain that agreement.

In due course you will need to 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 and are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

There is nothing to stop you paying more than the grant to your employees if you are willing to bear the additional cost.

That is all the information that is available about the scheme at present.

If you have staff who are self-isolating and receiving sick pay, you may wish to consider laying them off now instead since, in most cases, both you and they will be better off. 

Clearly there will be a time lag between making these payments and reclaiming the money from the government.  That will put extra pressure on cash. If that is a problem for you, you could tell employees that you will make the payments once you get the cash from the government. Alternatively, other support is available:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

That link also includes details of the statutory sick pay scheme and all the other support available for businesses.


Page last updated: 27th March 2020 5:06 PM