HPC Law: Flexible Furlough & Diversity Inclusion
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As usual, this month has been a whirlwind in terms of HR updates and changes. Our legal HR consultant, Daniel Meyer-Lopez has summarised what your business needs to know to stay contractually, legally and culturally in line.
For employers, the Coronavirus Job Retention Scheme (CJRS) or ‘furlough scheme’ has been really helpful to keep businesses going and to keep staff as opposed to making redundancies.
However, from 1st July, the Coronavirus Job Retention Scheme (CJRS) is changing.
From 1st July you are able to ‘flexibly furlough’ staff. So, what does this mean? The Government guidance says the following:-
“From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.”
This is a difficult time for businesses as they will no doubt be having to consider their future and their staffing levels, but it is hoped that the flexible furlough scheme will allow businesses to re-open their business safely and to take account of their staff members’ individual circumstances.
As businesses start to re-open, they will be considering whether they need staff to return and for how long. It is likely that businesses may not fully re-open and so the Flexible Furlough Scheme allows businesses to bring staff back part-time and furlough them part-time. So for example, you could ask staff to come back two days a week and then furlough them for the other three days.
The scheme allows you to change this week-to-week to allow for flexibility both for the businesses and employees, particularly those with childcare commitments and no support network, for example, grandparents who would normally look after children when parents are working.
Although the scheme can be week-to-week, businesses may know how much they will need their staff so this does not have to be week-to-week. The difficulty may come when businesses may not know how much they may need staff as it may be that until they re-open, they may not know the uptake in their business.
A prime example would be the hospitality industry. So if a bar re-opens, they may not know how many staff to return until they know what the uptake of people going to the bar.
At the start of the furlough scheme, you will have confirmed to your staff in writing that they were placed on furlough leave and if their pay was reduced to 80%, they will have had to agree to this reduction in writing.
In order to ‘flexibly furlough’ your staff members, you will need a new agreement to ‘part furlough’ your staff. The reason for this is that this is a change to their contractual terms as for example, you may be asking them to now work 2 days a week where they would normally work 5 days a week and take a pay reduction for the remaining 3 days. You will need to give them notice that they will be placed on the new hours and we recommend at least 48 hours’ notice is given.
In terms of the pay aspect, staff members will be paid their full rate for the days they work and their furloughed rate for the days they are furloughed which is usually 80%, up to the maximum of £2,500 per month.
Changes to the CJRS
Until now, employers have not had to contribute towards staffing costs, unless they have been ‘topping up’ salaries to 100%.
However, from 1st August, this will change as follows:-
For 1st August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
For 1st September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
From 1st October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for the time they are furloughed.
Businesses must consider their staff’s individual circumstances. So if staff have childcare issues because schools are still closed, or they have caring commitments for ill relatives then businesses need to take this into account when considering who they ask to return to work.
Businesses must take account of protected characteristics when deciding to who ask to return to work and must ensure that they are not discriminating against anyone who has a protected characteristic. As a reminder, the 9 protected characteristics are:-
- gender reassignment;
- marriage and civil partnership;
- pregnancy and maternity;
- religion or belief;
- sexual orientation.
If you have any questions regarding the topics covered in this article, please contact us using our socials below.
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