‘Furlough – the story so far’
On 20 March 2020, the government announced the Coronavirus Job Retention Scheme (CJRS) as part of its response to the COVID-19 pandemic.
Under the scheme, any employer can obtain a grant to cover 80% of the salary of employees and PAYE workers, up to a total of £2,500 per month for each retained employee, plus the associated employer’s National Insurance contributions (NICs) and minimum automatic enrolment employer pension contributions on the reduced salary.
The Government has announced that the scheme will be open until 30 June 2020 (unless it is extended further). In order to take advantage of the scheme, we are required to place employees on temporary “furlough” for at least three weeks, and seek their agreement to this change.
So, what have we done?
Further to our previous update on the Coronavirus Job Retention Scheme, we are delighted to announce that we made our first furlough payments on Friday last week.
From the advice we had originally received from legal advisors and industry experts, our thoughts on calculating furlough payments were to base them on an average of basic pay (NMW) only. However, it didn’t sit well with us as it just didn’t feel right. After much deeper further investigations and discussions with our legal advisers and debate within our own project team, we took a pragmatic view of what the scheme is actually intended to do, and how its aligns with one of our core values of putting our contractors first.
So, we took the decision to calculate the average pay to include the bonus or commission elements of the pay to give the final and best furlough pay calculation for our contractors. Subsequently, through the relentless work of the likes of the FCSA and other industry trade bodies, HMRC have listened. They have issued further guidance which now backs up our decision last week to use the full elements of NMW and bonus – which on our payslips is ‘Additional Taxable Pay’.
The government have to be commended on the speed at which they got the scheme up and running in such extreme and challenging circumstances, and we acknowledge the difficulties providers in our sector face when trying to navigate the guidance so as not to expose their operations to further financial risk for getting it wrong. This is new for all of us.
Many people outside the sector wont realise that our industry are unable to raise invoices during this period of furlough and therefore cannot raise any revenue. We are fortunate to have dedicated staff who are needed to process furlough payments, apply for the grants on behalf of our contractors and to support them through this period of uncertainty, and who themselves can’t be furloughed. It is a challenging time for our sector but here at ForeTwo, we stand by our contractors and workers to do what is right for them.
If you were on a live assignment which has be interrupted due to the coronavirus and you believe you may be eligible to be furloughed, please let us know ASAP by emailing firstname.lastname@example.org .
From all the team at ForeTwo – keep safe and well.