The latest stats
The government is now paying the wages for nearly a quarter of UK jobs under the Furlough scheme.
In the week ending 3rd May 2020, around 2.5 million people registered for the scheme, bringing the total claims to 6.3 million – 23% of the employed workforce.
The Department of Work and Pensions reported another massive 1.8 million new Universal Credit claims.
The spike in the numbers of people seeking assistance comes as the world braces for the most severe economic crisis since the 1930s. Forecasts suggest the UK economy will contract 6.5% or more this year.
3. The cost so far
The Government reports that around 800,000 employers have furloughed some or all of its workers since 20 April, when the programme started.
The Government added that it has distributed £8bn so far, with an average payout of £1,269 – about half of the £2,500 maximum. The scheme is due to run through June, suggesting the total cost could exceed £30bn.
In a TV interview, Chancellor Rishi Sunak explained that this level of expenditure was “not sustainable” and added: “I am working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way.”
In the last few hours, the government has updated its guidance around furlough and we’ve been looking through it.
There are 3 key updates that we think affect you:
1. The original guidance stated that employees who resigned and left after 28 February to start a new job could not be furloughed by their old or new employer.
The updated guidance now says that the old employer can take the employee back and furlough them, but appears to use very generic wording nor any guidance on how it would work.
Remember, there is no obligation to re-hire, and we advise employers to be cautious. This new guidance seems very high level and we await questions on it over the next few days.
2. The updated guidance still does not deal with the question of holidays, although Acas has confirmed that employees on furlough can take holiday at the same time. This will help employers whose employees return from furlough with a lot of holiday to use up.
3. The new guidance has also changed its stance in that now furloughed employees can work for a different employer during furlough, so long as their employment contract allows it.
See all our guidance here.
So Rishi Sunak has made amendments to the scheme, announcing them 3rd April.
If you have applied unsuccessfully, go back to the bank again. But wait a few days, as you’ll see below.
Only around £90m of CBIL loans have been approved for 1,000 small businesses so far, despite 130,000 enquiries. Not good.
Why is this?
Number one is the Treasury’s failure to place restrictions on interest rates, meaning banks were offering CBILS loans with interest rates of up to 30% and demanding personal guarantees from before they would lend.
Rishi Sunak announced the following amendments (3rd April):
He is expected to speak to the banks next week to review the scheme and “ensure everybody is playing their part”.
See more in our coronavirus survival guide
This post has now been replaced by our Coronavirus page:
This post has now been replaced by our Coronavirus page:
You should have a Business Continuity Plan and a Critical Interruption Plan in place and all staff should know both. For salons and spas, these tend to be one and the same document.
Business Continuity Plan
Your plan of how you will continue to run your salon if one or more of your staff phone in sick.
Critical Interruption Plan
Your plan of what to do if you need to close the salon for one or more days.
What to include in each
The list goes on but in other words: plan now because it can get chaotic very quickly when things are hitting the fan.
And make sure all your staff know what to do.
The NHBF have produced a really good guide which also looks at what to do if you need to close and what rights you have as an owner here:
In preparation for salon and spa staff taking time off for the corona virus, we revisit the rules around statutory sick pay SSP.
It’s in law that you have to pay SSP; but you cannot reclaim it back
Since 6th April 2014, an employer can no longer claim back any SSP it has paid to its employees. The SSP paid is therefore an absolute cost to the salon owner.
SSP is £94.25 a week for up to 28 weeks
Other rules to bear in mind:
You may not have to pay SSP if any of the following is true:
Self employed peeps (eg chair renters)
For self employed stylists and therapists, there’s no SSP; and also no other government benefits they can claim for time off sick.
They may have private health insurance but would have to check if Corona Virus is covered.
Advice from the FSB:
“Employees who develop symptoms will of course be unfit for work.
They will be entitled to SSP subject to meeting the qualifying criteria. Additionally, an employee is deemed to be incapable of work for SSP purposes if they:
• are a carrier of, or
• have been in contact with an infectious or contagious disease of a kind specified in Regulation 2(3) of the Statutory Sick Pay (General) Regulations 1982 and has been issued with a statement from a registered medical practitioner advising them not to go to work due to it being known or reasonably suspected that they have been in contact with or infected by one.”
Advice from ACAS:
“The ACAS guidance on coronavirus states, in brief, that there’s no statutory right to pay if someone is not sick but cannot work because they:
But it’s good practice for their employer to treat it as sick leave and follow their usual sick pay policy or agree for the time to be taken as holiday.
The guidance can be found here: https://www.acas.org.uk/coronavirus
Clearly if employees have been told to self-isolate on medical advice because it is known or reasonably suspected they have been exposed to the virus, rather than just as a precautionary measure, they would be entitled to SSP (subject to meeting eligibility criteria).”