Coronavirus Job Retention Scheme update – Employee questions answered

In my previous post, I talked about some major key points to come out of the new update to the Coronavirus Job retention Scheme update that was released by HMRC this week. But you know what? There was just so much to take away from it that I decided to do another which addressed the concerns posed by the employees affected by the scheme. So here are some of your still lingering questions answered.

How soon can I expect to be paid while on furlough?

Technically you should be paid straight away and as normal come payday as your employer will be claiming your wages back from the government. However, if your employer cannot afford to pay you upfront and as normal then you may have to defer payment of your wages for a month or two until they can claim your wages under the scheme.

Will I still pay tax on my wages?

Yes, you will still continue to pay income tax and National Insurance contributions and these will be deducted from your furlough pay as they would be from your normal wages.

What about my employee rights during furlough leave?

You will continue to have the exact same rights while on furlough as you would during normal employment. This includes being entitled to Statutory Sick Pay (SSP) in case you have to self-isolate or fall ill, rights against unfair dismissal and also redundancy payments. When it comes to maternity and paternity pay the normal rules apply and you can still claim through the scheme for enhanced contractual pay. You should receive normal pay on parental leave provided your employer has the cash!

Can my employer terminate my contract instead of putting me on furlough?

Jane Johnston from JLJ Legal outlined the criteria that would need to be filled in order for a dismissal to happen legally:

1. Capability (as a result of poor performance or sick leave)
2. Conduct (bad behaviour or falling below company standards
3. Redundancy (business closure, workplace closure, reduction in a particular kind of work or general cost-cutting exercise)
4. Contravention of statute (for example immigration restrictions)
5. Some other substantial reason (SOSR) (a very case-sensitive, catch-all provision that isn’t used very much)

“If you have two years’ service, your employer must follow a fair and reasonable process to dismiss on one of the above 5 grounds”

I’m a business owner, can I furlough myself?

Unfortunately not. You would fall under the self-employed category so you would need to seek help from the self-employment income support scheme. However, if you’re on the payroll, even as a director or owner then yes you can place yourself on furlough but the scheme will only cover what you would have received through payroll and not dividends. The understanding is that they do no income-generating work for their business while on furlough, but they can continue to run the business from a statutory perspective, for example preparing their accounts and processing the payroll.

Whose responsibility is it to apply for the grant?

Don’t worry, this happy task is your employer’s responsibility and can be done online from the end of April 2020. They will need to calculate the deductions and have certain information to make the claim so you can do your part by making sure your details are all up to date, hopefully via your company’s online HR portal.

For now, let’s hope this ship sails smoothly and that there are no issues. If you are on furlough then rest assured that you’re in good hands and HMRC are doing their best to make sure it’s business as usual in distinctly unusual times.

Written by Aoibheann Byrne | BrightPay Payroll Software