Some Key Points Following the governments updated guidance on Saturday 4th April 2020, there are still a few areas that have been left unanswered for our clients. Below we have put together a quick guidance factsheet for you on some of the queries we have had this week.
Holidays and furlough
Employees are able to accrue holiday in the usual way while they are on furlough leave but annual leave should only be used once the furlough period is over. Furlough leave is for a minimum of 3 weeks at a time, so should the employer wish their employees to take annual leave, this should be done after the initial period of furlough leave and then a new agreement should be signed following the annual leave period. Employers must give notice of 2 days for every 1 day they require their employees to take as annual leave.
The government have relaxed the rules for carrying holiday over to protect employers who have employees on furlough leave from having to allow employees to take their leave by the end of the holiday year. Employees can now carry over up to 4 weeks holiday for 2 years.
Bank Holidays and scheduled holidays
For employees who have a contractual right to take bank holidays, employers must pay any bank holidays that fall within the furlough period at 100% salary. This means that the employer must top up the 80% funding by a further 20%. For employees who do not have a contractual right to bank holidays, the employer is under no obligation to enhance pay for any bank holidays that fall within the furloughed period.
If an employee had booked annual leave before being furloughed, it is our understanding that they can have this holiday paid at 100%.
What about National Living Wage/National Minimum Wage increases?
It is our understanding that any employee who is on furlough at the time of the NLW/NMW increase in April will not benefit from these increases. The amount of funding should be calculated on the salary as at 28th February 2020. The salary will only be increased once the employee returns to work or if employees undertake any training while on furlough.
What is the difference between compulsory commission and discretionary commission?
The government have stated that compulsory commission should be used to calculate any employees normal pay. This is when there is a contractual obligation for the employer to make these payments. If there is no contractual obligation or the commission structure is ‘discretionary’ the commission should not be used when calculating normal pay.
When with the HMRC portal be open?
The government have suggested that the portal will be open from 20th April 2020 and there will be a 4 to 6 day processing period while background checks are being carried out. This is to prevent any fraudulent claims