Following the launch of the portal for applications under the Coronavirus Job Retention Scheme (CJRS) on 20 April 2020, it is estimated that over 150,000 employers have processed their claims for government reimbursements towards staff pay whilst on furlough leave. For further details of the CJRS please see our previous commentary here.
For those businesses in receipt of state funding, the guidance is clear: claims for staff wages should not be made where state funding continues uninterrupted, to avoid a scenario where the organisation profits from the exceptional financial support available.
Many social care providers are not fully state funded, with a high proportion in receipt of private income from privately paying service users – either in full or to top up the local authority contribution rates.
Unlike some other organisations in receipt of partial public funding, social care providers are currently without specific guidance on their entitlements to claim under the CJRS.
In addition, providers with reduced occupancy rates will have diminishing income, especially of concern for those whose income is only partially state funded.
Whilst the perception may be that furloughing staff will be unnecessary in the social care sector at present given the unprecedented strains on the services and staff shortages, certain situations may arise where staff are not required or are unable to work. For example, where the staff member is in a high risk health group or is shielding in accordance with Government guidance, and remains away from the workplace.
Under the CJRS these employers are permitted to place employees on furlough leave where they meet these criteria in order to be paid 80% of their salary (in accordance with the CRJS parameters). The position for partially publicly funded care sector employers is not addressed for these staff groups.
Likewise, what is the approach for non-clinical staff members – for example reception staff at residential facilities – who may have reduced workloads given the restrictions on visitors attending the provider’s premises?
The CJRS guidance has undergone several iterations, and has developed in its scope since the initial launch in March. The parameters have been expanded and explained further with the opening of the HMRC portal, however many questions remain.
For the time being, care providers who are in receipt of partial public funding and decide to furlough staff for the reasons set out above should be aware that they may not be able to claim to recover these payments via the CJRS. Payments to staff members should continue in any event to avoid unlawful deductions from wages claims even if recovery from HMRC does not occur or a claim is not submitted.
Detailed records should be kept as to the decision making rationale adopted with regard to the necessity of placing staff on furlough, along with a breakdown of staff pay compared to public funding received and any reductions in placement or service user numbers.