Organisations try to do whatever they can to keep their business alive. Usually, ‘People cost’ forms the most significant portion of their costs. Hence in these troublesome times, organisations having lower or no revenue have to make the tough decision to fire people in order to reduce costs. Thus, the government is trying to support these organisations by pleading not to fire their workers and instead furlough them.
“Furloughing” means that the employees still get to be on the company payroll when they are not working. The government would then reimburse organisations for the salary paid to the furloughed employees (as per the guidelines set by the government). The government calls this scheme: Coronavirus Job Retention Scheme.
The organisations can then apply for a grant that covers 80% of their monthly wage costs, capped to £2,500.
Who is eligible for the scheme:
– All employers who satisfy the below criteria are eligible to claim under the scheme.
– Organisations who have created and started a PAYE payroll scheme on or before 19 March 2020 enrolled for PAYE online
– Have a UK bank account
Which employees are eligible to be furloughed?
Organisations can furlough full-time employees, part-time employees, agency workers, and workers on flexible or zero-hour contracts. British citizens, as well as foreign nationals, can be furloughed, alike. Moonworkers Payroll Software accommodates these current scenarios and makes payroll processing extremely simple.