Richard Hartley, chief operating officer of S4labour, the online labour-scheduling management system from Catton Hospitality, has suggested operators should consider holiday for furloughed staff – potentially saving the industry a £4bn bill “it can ill-afford”. Hartley said: “The total cost of holiday to the industry is likely to be in the region of £5bn for furloughed hospitality staff up to the end of July. The government has confirmed you are able to request staff take holiday during the furlough period but employees need to be paid their full wage for time they are on holiday. While there is an immediate cash flow challenge to this, and no one has much spare at the moment, there is the advantage the furlough scheme will pay for 80% of this, or a proportion for higher earners. This potentially saves the industry a £4bn bill it can ill-afford.” Hartley also pointed out the scheme could further support the refresher training “needed for a workforce that hasn’t been active for more than four months” as well as for the numerous new measures that will need to be in place before reopening. Hartley said: “Employees are able to train while on furlough, as long as they are being paid the relevant National Minimum Wage/National Living Wage, effectively meaning government will support the wage bill to get our teams trained to where they need to be.”

S4labour is a Propel BeatTheVirus campaign member

The government has confirmed staff on furlough continue to accrue holiday in line with their contract. This can be varied if agreed with the employee but not below the statutory 5.6 weeks. It has also been confirmed staff can take holiday while on furlough, although this would be paid at the employee’s normal rate, meaning employers will have to pay the top-up over the government grant amount.

S4labour chief product officer Richard Hartley said: “Employers can request and restrict when their employees take holiday meaning there will be a careful balance between short-term cash flow and the longer term issue of a burdening holiday accrual. The government has stated it is keeping its policy on holiday under review. S4labour will release the ability to put employees on holiday while furloughed and calculate the top-up amounts within the next week.”

S4labour is a PropelBeatThe Virus campaign member

S4labour, the online labour-scheduling management system from Catton Hospitality, has warned the change in criteria for employee eligibility on furlough pay means some staff may now miss out. The government has extended the cut-off to 19 March 2020. But S4labour chief product officer Richard Hartley told Propel the criteria has also changed. He said: “For an employee to be eligible they have to be part of a real time information submission notifying payment on or before 19 March.

For many that pay staff on a weekly and fortnightly basis this will be good news as it will mean many more employees will now be eligible. For those on a monthly or four-weekly payroll this could mean some employees we previously thought were eligible are now not as some starters towards the end of February will not have been part of a full pay submission.

There will be more that benefit than will lose out but the headline statement is misleading for employees and they should be contacting their employer to check their situation. The announcement has also changed the reference pay for salaried staff from 28 February to the last pay period prior to 19 March. Therefore any pay changes post 28 February can now be taken into consideration.”

S4labour is a Propel BeatTheVirus campaign member

Following a number of updates from the government on the Coronavirus Job Retention Scheme (CJRS) we have updated our advice and want to highlight a few of these points and explain what they mean for operators.

Portal

Following a meeting of the parliamentary select committee, existing guidelines have been updated and will be published shortly. The government is aiming to open the portal on 20 April. It will take four to six days following submission for the money to be paid. Employers will be able to submit claims up to 14 days in advance. Claims may be made before the monthly payroll is run in April, which is great news for operators.

 Training

Employees can be asked to complete training while on furlough as long as it doesn’t involve them providing services to, or generating revenue for or on behalf of their organisation. However, when they are doing this training they are entitled to National Minimum Wage (NMW)/National Living Wage (NLW). This means employers would be required to top up an employees’ pay, over what is being support by the CJRS, to ensure for the hours they spend training they are paid NMW/NLW.

This is also the case for apprenticeship programmes (although it is likely you will be topping up to the Apprentice Minimum Wage). It is also worth noting employees are still required to pay the levy and this is not covered by the CJRS.

 Holiday

We are in need of clarity from government on the treatment of holiday for furloughed workers.

UKHospitality has stated holiday does not have to accrue throughout the furlough period, if this is part of the furlough agreement with the employee. The Chartered Institute of Personnel and Development (CIPD) argues only contractual holiday (anything above the statutory 28 days) can be varied by agreement and the 28 days that employees are entitled to under Working Time Regulations continue to accrue.

 There is also an un-answered question as to whether employees can take holiday when furloughed. Current advice from CIPD is they can but they would be entitled to their full pay so the employer would need to top up to this level. This could be a useful way of employers reducing their liability albeit it presents a current cash challenge.

Calculating pay

For salaried staff this should be their salary on 28 February.

For variable pay staff this should be the higher of their average monthly earnings over the past 12 months or their pay from the comparable month last year. For those employees with less than a year’s service it should be the average monthly earnings while they have been employed with you.

The challenge for many is variable pay workers that are not paid monthly as you will need to interpret the above to give a reasonable assessment of which is the higher. At S4labour we have developed a furlough pay type that will do the calculation on behalf of our customers.

If anyone would like support in calculating furlough pay for their teams then please contact me at Richard@staging.s4labour.co.uk

Richard Hartley is chief product officer at S4Labour 

S4labour is a Propel BeatTheVirus campaign member

The government released new guidelines yesterday on how to handle furlough pay (see link below for full details).

We are creating a furlough pay type for S4labour to support our customers through this challenging time but I wanted to write and share how we’re calculating this so others have the information to do so.

The government has said for employees it will pay a grant of 80% of earnings up to £2,500. This will be based on the higher of the average earnings in the whole previous 12 months (or fewer if they have worked for less time than this, including a part-month calculation if they were taken on in February) or the earnings in the same pay period in the previous year.

This is helpful for salaried staff but much more complicated for weekly paid employees on variable-hours contracts. We are therefore required to interpret how to calculate the above earnings for our weekly paid employees. We are going to apply the following logic:

We will calculate their average monthly earnings for the previous 12 months from the date they were furloughed. For example, if they were furloughed from 21 March we would reference 21/03/19 to 20/03/20 and work out a monthly average.

We will recalculate the last year’s monthly earnings every week based on the month that starts on the same date as the week last year. For example, for the week that runs 23/03/20 to 29/03/20, we’ll look at the monthly earnings from 23/03/19 to 22/03/19.

We will then take the higher of these monthly earnings and use this to calculate the weekly pay for the employee. This is good news for our teams whose earnings typically increase as we head into the summer months as they will benefit from this uplift.

All employees are eligible as long as they were employed by the organisation on 28 February.

We were pleased to see the government will additionally cover the National Insurance contributions and pension contributions for employers.

Employers are also able to top up their employees’ pay and we will support this functionality, although NI and pension contributions on the top-up aren’t covered by the scheme.

There’s still no announcement on how to treat holiday while staff are furloughed. In the short term, we’re going to maintain their accruals so we have an accurate picture of holiday entitlement as we come out of the pandemic but will amend this if further advice from government suggests we need to. Our thoughts are that the government is delaying making an announcement on holiday as it’s unsure how long the pandemic will last and to commit to any specific stance in the short term could have longer-term consequences.

We will continue to do what we can to support our customers and the wider industry. If anyone has any specific questions, email richard@staging.s4labour.co.uk and I will do my best to answer. Click here to view the new government guidelines in full.

Richard Hartley is chief product officer of Catton Hospitality

Catton Hospitality is a member of our BeatTheVirus campaign

Propel has launched BeatTheVirus to help operators through the covid-19 crisis. We have teamed up with Propel Multi Club conference series partners to offer the sector their expertise. Partners will offer more general advice and highlight some of the initiatives they are doing. Bibendum and Startleare the latest companies to come on board and join Airship, Bibendum, Bums on Seats, CACI, Christie & Co, COREcruitment, CPL Learning, Cynergy Bank, Elliotts, Hastee, haysmacintyre, John Gaunt & Partners, KAM Media, Prestige Purchasing, S4labour, Startle, Ten Kites, The NPD Group, Toggle, Trail, Venners, Wireless Social, Yapster and sector trade bodyUKHospitality.

Propel managing director Paul Charity said: “It is amazing to see how the industry has come together during this crisis and here at Propel we want to do our bit. This is why we are working with Multi Club partners to offer expert support and advice to our readers and to answer their questions at what is a tough time for everyone.”

Readers can email questions for our experts to paul.charity@propelinfo.com. Please use BeatTheVirus in the subject line. A selection of questions and answers can be found at the bottom of this newsletter.