Call for clarity over furloughed staff pay amid coronavirus

March 26, 2020 @ 8:30 by Steven Hugill

North East companies need greater clarity on Government salary support to help them navigate the coronavirus pandemic, an employment law expert has said.

Sarah Hall says it is imperative firms are given regular updates on the workings of Chancellor Rishi Sunak’s fiscal package.

Sarah, a partner in the specialist employment team at Newcastle-based Hay & Kilner Law Firm, says businesses must also aid their progress by keeping abreast of the different ways they could qualify for support.

The Chancellor’s emergency coronavirus measures include a commitment to continue paying 80 per cent of wages – subject to a cap of £2500 per month – for employees who would otherwise have been laid off, which is to be known as ‘furloughed leave’.

Employers will be asked to submit information to HMRC about their furloughed employees and their earnings through a new online portal, which will be launched in the near future and can choose to top staff salaries up to the usual amount if they wish.

Sarah said: “The Chancellor’s decision to pay up to 80 per cent of the wages of people employed by firms that are having to close their doors due to the pandemic has been very warmly welcomed by the business community.

“But there is still, perhaps understandably, very little guidance on how it will work in practice.

“We don’t know when employers will receive the money as the HMRC system is not yet in place and as the law now stands, it is very likely that furloughed leave will have to be with the employee’s agreement, particularly where there is no lay off clause in their contract and/or the employer is not choosing to pay 100 per cent of the salary.”

Additionally, Sarah said consideration must be given to pensions and other benefits, adding the issue of second jobs also remains unclear.

She said: “Employers will have to decide which employees are on furloughed leave, rather than the employees themselves, and any staff placed in this category should not undertake any work for their employer.

“Having staff working fewer hours does not currently seem to be an option, even if this is an employer’s preference, while it is not clear what the position is with regard to second jobs.

“There is also a degree of concern that the system could be open to abuse, with some employers potentially using it to prop up their businesses, and the Government may well introduce further measures to limit such actions.

“In such a fluid situation, it is essential for employers to keep up with the different measures that are being put in place.”

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