What amount do you claim under the Flexible Furlough Scheme?
You will claim a pro rata’d amount of 80% of salary, based on the proportion of hours not worked out of the employee’s normal working hours (their “usual” hours).
There are 2 ways to calculate an employee’s usual hours, depending on whether they have fixed or variable hours/pay:
- For those with fixed hours/pay, you take the number of hours worked in the pay period before 19 March 2020.
- For those with variable hours/pay, you take the higher of:
- the average number of hours worked in the tax year 2019 to 2020 or
- the corresponding calendar period in the tax year 2019 to 2020.
If employees are paid per task or piece of work done, you should work out the usual hours for these employees in the same way as for other employees who work variable hours, if possible.
When you calculate the usual hours, you should include any hours of leave for which they were paid their full contracted rate (such as annual leave) and any hours worked as overtime (but only if the pay for those hours was not discretionary).
Related FAQs
Although there is no formal selection process that must be followed in order to furlough staff, the basis for selecting who will be furloughed should be explained to all relevant staff. Basing this on work levels, required skills or whether work can in fact be carried out efficiently from home will help this process. Staff can be invited to volunteer to be furloughed or re-furloughed. Any requests can be considered on a case by case basis. It may be that a particular skill set is required which may result in an employee’s request being refused.
In the event that the contractor is displaying one or more of the above signs, then it is worth considering the following actions to protect the employer’s position as far as possible:
- Closely monitor the financial and on-site performance of the contractor in order to assess the likelihood and timing of potential insolvency
- Ensure all bonds, guarantees and collateral warranties have been obtained under the building contract, and if not take steps to obtain them immediately
- Consider the terms of any guarantees to ensure that the guarantor’s obligations are not inadvertently discharged
- Bonds may require adjudication to have been commenced (or even completed) prior to insolvency so as not to be stayed pursuant to insolvency laws
- Carry out an audit of the on-site plant, equipment and materials, and evidence this (for example with photographs and written records)
- Ensure that copies of all relevant documentation have been obtained, for example drawings, specifications and anything required to comply with CDM requirements. If not, take steps to obtain these
- Review the payment position under the building contract, including whether any over payments have been made to the contractor which should be reclaimed, what retention is held or has been released, whether any payment notices may be necessary, and whether there are rights of set-off which should be exercised
- Check whether the involvement of any third party is required, for example funders, landlords, tenants or purchasers who may have rights in relation to the building contract and how it is administered
- Review the terms of the building contract relating to contractor insolvency – hopefully the parties will be fully aware of the building contract terms and have been administering it correctly to date, but if it has been hiding in a draw then now would be a good time to dust it off and ensure familiarity with the relevant provisions!
In general. there is often a stick or twist decision. If the employer chooses to financially support the contractor (for example by agreeing different payment arrangements), this may help to keep the contractor solvent and more likely to complete the project, but it also exposes the employer to greater risk if the approach is not successful. Conversely, withholding payments from the contractor may make insolvency a self-fulfilling prophecy. The precise advantages and disadvantages of the approach will be dependent on the specific circumstances of each case.
If a tenant continues to refuse to take heed of the government’s social-distancing guidelines, for example by inviting large groups of people who do not reside there to their property, it can constitute a nuisance. One housing association successfully applied for an injunction. The injunction ordered by the Court stipulated that no persons, other than the children of the tenant, are to attend the property until the current social-distancing restrictions are lifted by the government.
A representative of the housing association highlighted the need for the current guidelines to be followed and the need for housing providers to ensure that all residents living in their communities are kept safe during this time of ‘unprecedented risk’.
This case demonstrates that flouting of the current restrictions is likely to be considered anti-social in the eyes of the courts – a point which all housing providers should bear in mind during this period. Further, it highlights the availability of an alternative remedy to the issuing of possession proceedings (in light of the government’s moratorium on evictions) to deal with anti-social behaviour during the next three months, Covid-19 related or not.
You should have in place a dispute resolution procedure that sets out the appeal process or contractors or the agency as appropriate. You must respond to an appeal within 45 days.
If the status determination is disputed you should consider the contractor or agency’s reasons objections. You must consider if the original determination is to be maintained and give reasons for this. Or a new determination with reasons can be provided if appropriate.
Records of disputed determinations and the outcome of any appeal should be kept.
The Chancellor announced:
- A new “job retention bonus” for employers to access for furloughed employees subject to certain conditions being met – see below for more information.
- A “Kickstart scheme” which will directly pay employers to create jobs for any 16-24 year old at risk of long-term unemployment.
- Incentives for employers to take on apprentices.
As a result of the CJRS being extended, the Job Retention Bonus will no longer be paid in February 2021.