'Furloughing' employees and the 80% wage subsidy

I got some useful stuff from British Printing Industries Federation today on the procedures and issues around ‘furloughing’ workers - ‘employee retention scheme’ and the 80% wage subsidy, and a template worker letter, that Calverts has just used and may be of use to people here.


Thanks for sharing this, Sion, we are just looking into this so really helpful

The letter is old fashioned, 2 copies and signature etc. We sent it by email asking for explicit consent and agreement of each worker by email reply (though have printed those emails off as a backup record!)

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Has anyone had any more thoughts on this? I know we spoke about the directors duties thing @aaron - this was interesting to read, but still pretty inconclusive. @polly how about you guys, any updates?

Hi Lucy,

This is what we’ve got from our account on furloughing directors:

Directors on furlough leave

HM Treasury have said government support for furloughed workers can exceptionally apply to directors. The director has to stop all work for the company. If you continue to manage the company, communicate with customers or plan for the future you would not qualify for this government support. You may, and indeed must, continue to meet statutory duties such as Companies House filing. If you, or any director, is going to temporarily stop work for the company you should send a letter from the company to the director (see template letter sent last week attached to our “Coronavirus guidance part 4” email). The company will continue to pay you as normal. Let us know if you are doing this and we will help with the first grant claim at the end of April. If you qualify HMRC will pay a grant to the company up to 80% of salary costs (with a £2500pm cap).

Note that if you change your salary from a regular amount, then the grant will be 80% of average pay for 2019/20 (or 80% of pay for same period one year ago if that’s higher). Directors must not pay an artificially increased salary with the aim of increasing the furlough leave grant. In any case for most people this will result in extra national insurance which could outweigh any extra grant.

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If Directors are paid through PAYE, they can definitely furlough and claim 80% through the JRS. They may not do work, like any other furloughed worker, but their fiduciary duties as Directors still apply. Calverts is interpreting this as meaning that we can still take proper and necessary care of the business - for instance prepare and submit filings, but also make sure our building is safe, fulfill contractual commitments to e.g the landlord, pay rates, sort out communication protocols so that we can be in touch with our workers (each other), have ‘board’ meetings, and so on. What we can’t do as furloughed worker-Directors is do any or manage any work.

It’s only ‘exceptional’ because most Directors are not paid as employees. Most worker co-op Directors are paid as employees and can therefore furlough and claim the JRS grant. The govt will also pay the employee’s NI and mandatory contribuition costs. They will pay emplyer’s NI on the 80%, but not on any top-up you choose to make to bring people up to full wages.

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Very good points, Sion, thanks. As ever you’re one step ahead :slight_smile:

My point re emails etc was not well articulated (never do things in a hurry).

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