A poll of 539 charities carried out by the Charities Aid Foundation on March 31 and April 1 found that 26% of charities strongly agree that they will need to use the government’s job retention scheme and furlough staff. Source: https://www.civilsociety.co.uk
Over the past week or so you may have heard people talking about something called furlough, and wondered like many, what it means, how it works, and does it affect your organisation?
To save you the time, we have put together this post to give you the main points so that you can decide if furloughing is something your organisation should consider. Full information can also be found on the .GOV website.
Firstly, what is Furlough?
Martin Lewis, the money saving expert, explains it as
like putting your TV on standby, you switch it off, it’s not fully off and it waits until you switch it on again. This is what the government is trying to do for the many who can’t or won’t be able to work.
Furlough is the Government’s Coronavirus Job Retention Scheme, a support initiative for employers who want to retain staff as opposed to making them redundant, but who do not have the means to pay them a salary, as the nature of their work becomes obsolete during the current pandemic.
The government has pledged to fund 80% of an employee’s salary, up to the amount £2500, for a minimum of 3 weeks and up to a period of 3 months. As a company you have an option to top up the extra 20%, but this is not mandatory. Employees must have been hired before the 28th of April to be eligible.
So in essence, if you have employees that due to the governments’ ‘stay at home’ policy means that they can no longer do their job role for your charity, in any capacity, where working from home is not an option, then chances are that these staff members can be furloughed.
It is also possible to furlough employees that have no choice but to remain at home to look after children at this time, and again cannot do their job role from home. This however, is on a case-by-case basis and is down to the individual organisation to decide.
Do all my employees qualify for furlough?
The government policy mainly discusses employees that are on their company’s PAYE scheme, which will be the majority of staff working for a charity.
The scheme covers the following employees:
employees on agency contracts
employees on flexible or zero-hour contracts
employees who were made redundant since 28 February 2020, if they are rehired by their employer.
However, employees that are paid solely through external core cost funding, may not qualify.
Further research into this has shown that there is a possible way to counter this, and some charities have spoken with their funder and have asked for some flexibility but this is at the discretion of the funder.
Charities that rely heavily on donors may have to ask donors if restricted funds can be used to pay salaries during this time, in order to place employees on furlough and take advantage of the 80% grant per employee.
Benefits of Furlough in a nutshell
Furlough prevents redundancies and helps retain staff.
Charities do not have to pay staff salaries for a period of up to 3 months where there is no work for them.
Save on recruitment costs, knowing that staff are still employed and ready to work as soon as is possible.
Employees receive a salary, if not a little less than before, but have peace of mind that they still have employment.
How can my charity apply for furlough?
Via the .GOV website, however the online service you’ll use to claim is not available yet. The government expects it to be available by the end of April 2020. Wages will then be backdated to 1st of March 2020.
By Fatma Emin
All Ways Network