Although the government does not expect employers who receive public funding for staff costs (where that funding is continuing) to use the Scheme, it may be something that higher education institutions want to take advantage of. This may be particularly relevant for staff employed in their commercial undertakings.
Details of the Scheme were published on 26 March 2020 and the HMRC portal is expected to be up and running by the end of April 2020. The Scheme is open for at least three months, from 1 March 2020 and will be extended if necessary.
The Scheme applies to employees who have been on your payroll since 28 February 2020 and to staff on any type of contract. This includes full-time, part-time, variable and zero hours contracts.
In order to access the Scheme, employers have to 'furlough' (or temporarily lay off) affected staff. HMRC will reimburse 80% of the wages of furloughed staff up to £2,500 per month, plus associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on the subsidised wage. The employer can choose to pay employees the difference between the furlough payment and their salary, but does not have to.
The first step is to identify which staff this applies to. Selecting affected staff might be straightforward where an entire category of staff is to be furloughed. However, if some staff will still be required to continue working, you must be able to evidence the objective selection used to determine which staff will be furloughed and who will remain at work.
The guidance requires staff to be notified of the change in their status and confirms that existing employment law continues to apply. You will need agreement from staff to make a change to their contracts, but in many cases this should not be contentious. If sufficient numbers are involved, it may be necessary to engage in collective consultation in order to change terms of employment.
Once furloughed staff have been selected, you should write to them confirming that they have been furloughed. Their details will need to be uploaded to a new HMRC portal, which is currently under development.
The government guidance can be found here.
The above reflects guidance as at 27 March 2020. We will continue to update this as the situation develops.