Not everything has been clarified about how these schemes will work, but we are doing our best to get answers and will provide updates when we can. Here’s what we know so far.
What is the Coronavirus Job Retention Scheme?
Update 27/03 - the government has provided further information about claiming for wages through the scheme here.
This initiative was announced on 20 March and will see the government reimburse 80% wages, up to £2,500 a month, of staff who have been furloughed. This means employees who have stopped working but are kept on payroll. All employers are eligible, and the process will be backdated to cover wages from 1 March. It will initially run for three months, but the government says this may be extended if necessary. The scheme is not yet up and running but the government is aiming to have it set up before the end of April and expects the first grants to be paid within weeks. Behind the scenes industry leaders are pushing for 24 April.
How do I apply?
To qualify you will need to designate affected employees as furloughed workers and notify staff of this change. This means you can re-hire staff who have been laid-off and put them on furlough, as some hospitality groups have already started to do. This is the intention of the scheme, and thousands more jobs will be lost otherwise. Employers will have to submit information to HMRC about furloughed staff and their earnings in the past month through an online portal, that is still being set up.
The Licensees Association has provided a furlough letter template to help businesses communicate to staff.
How does pay work in the meantime?
Depending on your cash flow you may be unable to pay staff as normal right away. One option to ensure they still have money coming in is to pay staff in instalments, such as 50% of their owed wages in two weeks, and the final 50% when the scheme is up and running. London Union's Jonathan Downey says: “I don’t think the government has understood that some hospitality businesses are literally week to week operations. It’s a really good idea for every employer to do an element of deferment and stage payment if they can.”
Communication is key
If you are going to pay wages in instalments or are unable to pay out anything in the interim, it is important to speak honestly to your staff. Explain the situation and that you are putting them on the furlough scheme. You will need to consider whether you can or will top up salary to 100% over the 80% government grant. If you are unable you will need to explain to staff that they are facing a pay cut. Higher-paid employees earning more than £2,500 a month may be facing a substantial reduction. Downey says: “It could be [furloughed pay] or nothing. Employers and employees are all in it. We’ve just been thrown a lifeline, but everybody’s worried about the colour of the lifeboat that’s come to rescue us. It doesn’t matter, just get in the boat.”
There are several financial support schemes available to staff, some are outlined here.
What if I need financial support to pay my staff now?
If your business needs short-term cash flow help you may be eligible for a Coronavirus Business Interruption Loan. These became available on Monday 23 March and will initially run for six months. The loans are managed through the British Business Bank, which has a full list of providers here. Applicants will have to prove they are viable businesses, but just need extra support to deal with the current disruption.
I am still running a takeaway business, how can I keep my employees safe?
Restaurants, cafes and pubs running a takeaway service are still permitted to open by the government. There are hygiene measures you can put in place and ways to rearrange the space to keep staff as safe as possible. You can read Public Health England guidelines here and some advice on converting your business to a takeaway here.
The Food Standards Agency also offers advice and resources, to access click here.
What if my staff are still employed as normal but cannot work due to being ill?
Employees who are self-isolating because of coronavirus will now be able to qualify for statutory sick pay of £94.25 per week from the first day they are off work. They will need to provide you with an isolation note from the NHS here.
Small and medium-sized businesses will be able to reclaim up to two weeks statutory sick pay (SSP) paid to employees for absence related to coronavirus. This applies to all companies that had fewer than 250 employees as of 28 February 2020.
This scheme is not yet live but in the meantime it is important to keep a record of employees claiming SSP so you can reclaim. Read the government guidance here.
Other useful links
Mental health support for you and employees https://www.hospitalityaction.org.uk/
The government has set up a business advice portal https://www.businesssupport.gov.uk/coronavirus-job-retention-scheme/
Broader government advice for employers https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
UKHospitality is offering regular guidance and email updates https://www.ukhospitality.org.uk/
#UnitedWeStand has been created by William Reed hospitality titles BigHospitality, Restaurant magazine and Morning Advertiser and is supported by Arla Pro, McCain and Unilever Food Solutions.