Anthony Wolny
2 minutes length
Posted: 16th April 2020

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 1st 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