A North East employment law expert is advising regional employers to keep on top of developments around government support for staff salaries that is being made available due to the coronavirus outbreak.
Sarah Hall, partner in the specialist employment team at Hay & Kilner Law Firm in Newcastle, has issued new initial guidance on the unprecedented package of support measures for businesses affected by the pandemic that was announced by chancellor Rishi Sunak.
The measures included a commitment to continue paying 80% of the wages, subject to a cap of £2,500 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.
With government guidance on how it will support businesses continuing to develop each day, Sarah Hall is advising owner/managers to stay abreast of the different ways in which their company could qualify for different types of support.
She says: “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% of the salary. Consideration will also need to be given to pensions and other benefits.
“Consultation and appropriately worded documentation therefore play a vital part in avoiding claims and we have already been providing regional employers with letters and scripts to assist with this.
“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 who were already struggling before the current situation 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 that will help them and their employees navigate the coming weeks as smoothly as possible.”
Established in 1946, Hay & Kilner is one of North East England’s leading independent law firms and provides a full range of legal services to businesses and individuals from both within and outside the region.