What does furlough mean and how can Wagestream support you and your staff?
Furloughing is a term that little had heard of or understood just a few weeks ago. Now it’s a term that’s in the news daily and that’s key to the future success of businesses and their staff across the UK. It’s also a term that many will probably never forget.
However, the speed at which this initiative and others have come into our consciousness has left many confused about what will happen to their jobs and businesses, at least for the short term.
What does furloug mean?
The dictionary definition describes furloughing as a process where a leave of absence is granted to staff. Understood in the context of Covid-19, it’s a process where the government supports businesses to keep staff employed and paid at a time where there is no work needed and no money coming into the business.
It means that, once we’re out the otherside of the pandemic, staff will still be employed by their same employer and that they will be able to get back to work quickly. It also means that employers will be able to get their businesses up and running as normal to start bringing in much needed revenue.
How does the government scheme work?
From March 1st, running for at least three months ( The Govt. have said that they will extend the scheme if necessary), employees can now ‘furlough’ staff instead of making them redundant, something that could severely halt productivity when we eventually see the other side of the pandemic.
The scheme allows employers to claim up to 80% of their staff’s wages, up to a maximum of £2,500 per month. The grant, which will not start to be paid until April, can be backdated until March 1st.
An employee can be furloughed for a minimum of three weeks, and according to one law firm, it would appear that employers cannot rotate who they furlough. This could cause issues where employers are keeping a few people on who then become sick. The firm also make it clear that anyone absent due to sickness cannot be furloughed and needs to be put on statutory sickness pay. There are currently no restrictions on which type of businesses can access the scheme.
To find out more about what it means for your employees, click here.
How to claim
To claim, employers will need:
- Your ePAYE reference number
- The number of employees being furloughed
- The claim period (start and end date)
- Amount claimed
- Your bank account number and sort code
- Your contact name
- Your contact number
This needs to be then submitted to the HMRC/ The HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account.
Please find more details on the process here.
Working with Wagestream to support your furloughed staff
Wagestream can support you and your staff through the furloughing process by providing staff instant access to up to 50% of their furloughed wages. It means you can provide much needed financial support for your staff and reassure them through this period of uncertainty.
How does it work?
- Alert Wagestream to any ‘furloughed’ employees via your integration or a manual CSV upload
- Ensure the field for ‘furloughed’ employees is updated to represent 80% of income*
- Enrolled employees can immediately access 50% of their ‘furloughed’ income
- Wagestream and the employer will then settle up via the normal process on payday
- Employer should claim reimbursement directly with HMRC
*This could be a fixed salary amount/ contracted hour amount/ average hours amount.
How does this affect reimbursement from HMRC?
Employers do not need to wait until they have submitted their information to the HMRC before they can start issuing wages to furloughed staff with Wagestream. This means that employers can start supporting their staff straight away and helps to ease cash flow issues.
How will this be communicated to my staff?
To ensure maximum engagement during this period of reduced touch points with the business and managers, we’ve outlined a 5 step communication plan. Wagestream will deliver the communication, onboarding and support plan and expect to achieve 70%+ adoption for your staff.
The functionality is now available on the Wagestream portal and aims to reduce any financial stress that may be caused by the outbreak. If you have any questions please contact your CSM or reach out via email@example.com
If you are not already working with Wagestream but want to make use of this feature or any other Wagestream features you can now go live in under 24 hours under a new process. For more information and to go live in under 24 hours please click here to get access to our Furlough Support Info Pack.