'My employer called me to say that they cannot furlough me 'says Katie who was employed by a retail store in March. Although she was employed in March but she won't get paid until April. This means she is not eligible for the furlough payments because her payroll was not submitted on March 19.' Although the employer was really apologetic and they said they can keep me on the payroll and give an unpaid leave'.
This gives Katie job security but at the same time since she is still employed she won't be eligible for the Job Seekers allowance as she is still employed.
The Government announced new rules in the employment Law starting from March1 under which the employer can now furlough their employees instead of firing them. This means that they can put you on temporary leave because of Coronavirus (Covid-19).
What is furlough? Furlough is the term which is used for the first time in the UK Employment Law- Furlough means to 'suspend temporarily'. UK Government in its Job Retention Scheme, gave the employers an option to furlough this means if an employee is unable to work for your employer either because they are not able to operate or they might not have any business for you they can pay you 80% of your regular wages through the Coronavirus Job Retention Scheme, up to a monthly cap of £2500. This furlough payment can be topped up by the employer if they want to.
Despite the Government Job Retention Scheme which is helping more than 6 Million people there are thousands of employees like Katie who are finding themselves in the same situation where they cannot be furloughed. They either started their new jobs around the times when the businesses started closing and the lockdowns had started due to Covid-19 or they had left their jobs and their start date of the new jobs were in April or May this will leave them in no man's land.
In this time of crisis, the financial situation of such people is going to be very tough. What options do they have to meet the ends?
Katie can return to her old employer. Katie can talk to her old employer about her situation. The treasury department has confirmed that it is totally legal to re hire an old employee who was made redundant after 19 March or they left the job on the voluntary basis to join another job as long as they were employed on 19 March.
Despite the government paying all the salary, Ni and the pension contribution .Some employers might be reluctant to do that as they might be having cash flow problems.
She can look for another Job. Some places are still hiring workers. According to glass door, a website about the employers and the employees, there are jobs in the supermarket chains like Asda and lidl. And the health sector is also hiring.
Universal Credit: Some other options are available to the employees who are not eligible for the furlough payments in this time of Crisis. This includes an increase in the Universal Credit Allowance. For further information on universal credit follow the link: https://www.gov.uk/sign-in-universal-credit
If you need any information related to furlough, please contact Taxaccolega Chartered Accountants who are based in Croydon and Southall on 02081270728 or email us at info@taxaccolega.co.uk.