Childcare Counsel - furlough scheme and reduced hours


Hannah Belton, director, Morgan LaRoche, sets out key aspects of the Government’s new Coronavirus Job Retention Scheme.

Employers can choose to ‘furlough’ staff who were employed on or after 28 February 2020. A furloughed worker simply means a worker not provided with any work but being kept on the payroll. The worker will remain employed while furloughed (and continue to accrue holiday and be protected under employment law). This includes zero-hour workers.

The Government will reimburse, by way of a grant, 80 per cent of all furloughed staff’s wages to avoid employers having to make them redundant. This is subject to a cap of £2,500 per worker per month plus associated National Insurance contributions and automatic enrolment pension contributions.

Whether or not you need specific consent from the employee depends on whether there is a right to lay-off in your contract with the employee.

The scheme will run initially for three months from 1 March, with the online portal expected to be up and running by end of April. The scheme will reimburse 80 per cent of wages so the employer will need to have paid those wages first to claim reimbursement.

A worker has to be on furlough leave for a minimum of three weeks and there is nothing in the guidance that prohibits rotating furlough leave with weeks of work. During furlough leave, staff can undertake volunteer work without bringing it to an end.

Reducing hours of work with employees’ consent

You may wish to ask employees to work reduced hours for a temporary period to provide services to children of key worker parents. Any change to an employee’s hours of work can only take place where there is agreement on both sides. Where agreement is reached to reduce an employee’s working hours, an updated contract of employment will need to be issued (bearing in mind the legislation changes occurring in relation to contracts of employment issued on or after 6 April).

For further information, contact Hannah Belton, director, on hbelton@morganlaroche.com and go to www.morganlaroche.com.

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