How to Process Employees Returning from Furlough in Payroll?  

    13-06-2020 10:05 AM Comment(s) By Stuart

    The job retention scheme of the UK Government, formally known as furlough, has steadily changed from a full working benefit, replacing staff wages through proxy funds, into a staggering return to push the workforce out of this economically slow period during the pandemic. The last few months have been defining how cloud payroll management has adapted to the challenges of today's business needs. The scale of support has slowly bent down, returning the payroll accountability in the hands of a business.


    Business as Usual: Payroll Management


    As furlough diminishes its supporting role, the Britain Government sets the mood to return hopeful in finding its way back to normality or economic bliss. This may take long, but the first step is always a big one.


    October onward, the furlough role will payout 60% of employee wages (or up to £1,875) per month. Firms will be expected to pay the remaining 20% amount. However, when October ends, this benefit will end too.


    The return of employees to a typical workplace, despite all the social distancing, marks a change in how payroll has been processed during the pandemic. Indeed, the confusion over funding has meant that payroll has been open to error and disorder more than ever.


    Once informed by writing, businesses can reintroduce employees to a new, though mindful, office environment. Companies will need to continue ongoing assessments in terms of payroll, mostly concerning the office's safety and regulation. Consider, for example:

     

    Any jobs that are mission-critical to efficient business operation and introducing those back into the office.

    The personal requirements for staff that might be shielding still or temporarily caring for vulnerable people. This is, essentially, a judgment about risk (Read the Government Guidance here).


    Once the furlough period ceases, entirely withdrawing financial aid, firms will carry the expectation to deliver their payroll and pay all staff outside of external funding. Yet, for those businesses that successfully manage this transition, there is another Government-led incentive on the horizon. Pithily summed in a headline, the Government's "a plan for jobs 2020" is intended as a bonus for businesses, another style of economic stimulation, that comes in the form of a £1,000 bonus for every employee a business returns safely to work. This benefit is accessible in February 2021.


    Until then, many businesses planning a full return will be in mid-transition, scaling their business operation back to its most maximum height. With all the confusion of furlough’s wind-down, it can help seek direction and control of your payroll from a specialist like Payroll Hub for Zoho. A cloud-based payroll management software with third-party integrations can effectively take on your payroll and help your operation find clarity again.


    Employees Returning from Furlough: What It Means for Your Payroll 

     

    We’ve gathered a list of FAQs for employers using the COVID-19 job retention scheme (CJRS) to help guide your safe return. 


    1. We have employees still on furlough – when do they need to be in work for?

    Employees can remain on furlough until this additional support is withdrawn at the end of October. Employers have the option to slowly introduce their workforce through a “flexible furlough” program until then, which enables a staggered approach to employees re-entering the workforce. 

    This means, for employers, you should adjust your payroll for a flexible workforce. Some employees may only be entering into the office on a part-time basis and are still rotating.


    2. What is the furlough claim period now? 

    Since July 1st, there has been no minimum number of days or weeks for an employee to be on leave before a claim can be made. However, you need to carefully consider where this falls in the calendar month, as lawsuits against seven days have special rules.


    3.How will changes in the CJRS affect employer contributions in the coming months? 

    From October 1st, employers must contribute 20% of employee wages (on anything up to £625). This includes national insurance (NI) and pension allowances. After that, employers may be eligible for a new incentive to return their employees to the workforce.


    4. Who can return to work, and with what pay? 

    The CJRS is intended to deliver staff back to work, avoiding redundancies where possible. At the close of October, all staff should be safely working full time with their employer, where payroll resumes are generally under the employer. 

    Still a bit confused?


    It’s reasonably confusing to navigate our stance on leave and what the workforce looks like after that. If you’d like to take the pain out of payroll, get in touch with us today about managed payroll services. 

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