Here to Help: What businesses need to know about furloughing employees

The COVID-19 pandemic has resulted in the government issuing a Job Retention Scheme that encourages businesses to furlough employees rather than making redundancies.

But for many furloughing is an unfamiliar concept, creating a lot of uncertainty and confusion.

To support, we’ve compiled the basics of furloughing during COVID-19 to ensure your processes are correct, so you receive government support.

What exactly is furloughing?

Furlough leave is when employees are placed on temporary leave instead of being dismissed, asked to take unpaid leave or made redundant.

The intention is to provide businesses with the option to review circumstances and pursue the next steps without laying off their workforce.

Also, it’s important to remember while on furlough leave, employees can’t work but they can engage in training as long as it doesn’t provide services to generate revenue for or on behalf of the organisation.

How is the Job Retention scheme linked?

The Government’s Job Retention scheme will pay 80% of furloughed employees’ salaries up to £2,500 per month, providing businesses with added financial security when navigating these uncertain times.

During this period employers will only have to pay furloughed employees 80% of their wage but they can choose to top that up.

The scheme will be backdated to 1^st March 2020 and will be open for 3 months initially.

For more information on the scheme, check out our blog here.

Here to help

You must be accurately calculating the correct 80% wage to ensure you can claim back the maximum amount and that you aren’t under/overpaying employees.

This requires you to calculate the monthly earnings, start/end period, Employer National Insurance claims and Employer pension claims.

The process can be extremely time-consuming especially if you’re managing multiple furloughs.

To support, HMRC has created a Furlough Calculator to help find the claim figure quickly and easily.

Check out the calculator here and for more help during these uncertain times, visit the IRIS support hub for the latest content and news surrounding COVID-19 and business continuity

Stephanie Coward

Managing Director, HCM

Stephanie Coward is Managing Director for HCM at IRIS, where she leads the strategy, innovation and growth of the organisation’s HR and payroll portfolio. She is responsible for positioning IRIS as a trusted partner to HR professionals and ensuring its solutions support the evolving needs of modern workforces.

With more than 25 years’ experience in the technology sector, Stephanie brings deep commercial and operational expertise, with a passion for improving the employee experience through technology.

Stephanie is committed to advancing IRIS’ HCM offering and helping organisations build more resilient, empowered workforces.