ESB Accountancy’s Furlough FAQs- Frequently Asked Questions for Gloucestershire employers.
This blog post leads on from yesterday’s ESB Accountancy’s previous post at – Furlough – it’s meaning for Gloucestershire employers
Do I have to place all of my employees on furlough, or can I be selective?
It is clear that the Treasury does not envisage an all or nothing approach. Some employers will need to maintain a skeleton staff even if the majority of their operations are shutting down. Some will only need to send a relatively small proportion of their employees home while other parts of the business carry on almost as normal. It is clear that employers and employees will be able to benefit from the scheme in either scenario.
Can we change which employees are furloughed at any one time – can an employee be furloughed, brought back to work and then furloughed again?
The guidance makes it clear that the minimum period for which an employee may be furloughed and take advantage of the scheme is three weeks. However there is nothing to suggest that an employer cannot rotate staff in and out of the furlough scheme provided that each rotation is at least three weeks long. This not only allows the employer to focus on those areas of the business that need attention at any one time, but also allows a fair distribution of work and leave among employees.
The furlough scheme does not pay all of an employee’s salary – do I have to top up their pay to the full amount?
The guidance says that this is voluntary – but it is in reality a matter for the contract of employment. For most employees on a salary, or with a guaranteed minimum number of hours the employer remains obliged to pay the employee in full if it is not in a position to offer work. To that extent the furlough scheme subsidises the employer’s wage cost but does not replace the obligation to pay wages.
If there is a clause in the contract allowing the employee to be laid off without pay then the payments made under the furlough scheme will be in addition to the employee’s contractual entitlement and there will be no obligation to top up the employee’s pay to the full amount.
This means that even with the benefit of the furlough scheme the employer may be facing a substantial contractual obligation to employees for whom it can provide no work. One option is to agree a temporary reduction in salary so that the amount paid by the furlough scheme represents the full amount to which the employee is entitled. The employer could make the employee’s consent to such a change dependent on the employer designating them as furloughed rather than making them redundant.
Can I instruct employees to take annual leave if I cannot offer them work?
Under the Working Time Regulations an employer can instruct a worker to take annual leave by giving notice that is at least twice the duration of the leave that must be taken. So if the employer wants the employee to take two weeks’ of annual leave entitlement then it must give the employee four weeks’ notice of this. There is of course nothing to stop employers and employees from agreeing that any given period without work should be treated as annual leave – although the terms of the furlough scheme will reduce the incentive to reach agreements of this sort.
Can I instruct employees to take annual leave while they are on furlough?
Nothing the guidance so-far published by the Government would seem to prevent this. However an employee forced to take annual leave would normally be entitled to be paid in full for that period rather than at the capped figure provided for in the job retention scheme.
What about if they are off sick or self-isolating?
It is well established that a worker cannot be forced to take annual leave while off sick.
How do I stop too many employees taking what is left of their annual leave later in the year?
The Government has amended the Working Time Regulations to allow employees who have been prevented from taking their basic four-week annual leave entitlement to carry over that leave for up to two years. Where it is not reasonably practicable for employees to take their full entitlement this year, therefore, they will be able to defer their remaining leave to next year. The additional leave of 1.6 weeks must still however be taken in the current holiday year.
The Regulations also make it clear however that the employer can only defer the employee’s request to take annual leave where it has ‘good reason’ to do so. While a rush in demand for leave towards the end of the year may well satisfy this requirement, the employer should make every effort to accommodate requests for leave where possible.
Can employees be furloughed during their notice period?
There is nothing in the scheme to prevent this.
Please talk to us at ESB Accountancy to discuss how your business can comply with the new tax, finance and accounting laws – with several decades of financial experience here in Gloucestershire you can either ring us now on – email us on firstname.lastname@example.org or click the Contact Us buttonor please fill the form at the bottom of the contact us page.