The government has set up the Coronavirus Job Retention Scheme which allows employers to furlough staff for up to 4 months from 1 March 2020. The point of the scheme is to allow employees to remain on the books during a period when their employer may not have work available for them and thus avoids redundancy. The government will pay 80% of the employee's salary (up to a limit of £2,500). The employer can choose to make up the remainder of the salary.
The scheme went live on 20th April 2020. Broadly, the scheme allows employees to remain employed by their employer but they are not permitted to work during their period of furlough. The guidance is being updated regularly. Employers must ensure that they do not abuse the system by allowing or requiring employees to work whilst they are furloughed. It is reasonable to assume that HMRC will carry out checks after the scheme is closed.
There have been reports of hardship caused to employees who have been made redundant by their employer just prior to the introduction of the scheme. The guidance has been altered to allow employers to re-employ such employees to enable them to take advantage of the scheme.
It is vital for employers to ensure that they comply with their obligations under the scheme and the government guidance is being regularly updated.
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