Many salon workers including apprentices have found themselves furloughed as the COVID-19 pandemic takes hold.
But what does furlough mean and what about your training? Here’s the latest, courtesy of the National Hair & Beauty Federation (NHBF).
1 What does ‘furlough’ mean?
Being furloughed means employees are kept on the payroll, even though they aren’t working for your salon or barbershop. The minimum time employees can be furloughed for is three weeks.
2 Why does furloughing help my business?
If you furlough your employees the government will pay you 80% of their usual monthly wages before tax as of 28 February, up to a maximum of £2,500 per person per month.
The government will also pay for employer’s National Insurance Contributions and the minimum employer’s pension contributions.
3 What about employees on National Living Wage/National Minimum Wage (NLW/NMW)?
Furloughed employees are not working. They can be paid 80% of their usual monthly wages before tax as of 28 February, even if this would take them below the NLW/NMW.
Increases to the NLW/NMW came in on 1 April, but this does not apply to furloughed workers (unless they are doing training while furloughed – see below).
When they are working, employees are entitled to the NLW/NMW so new minimum wage rates would apply (see table below).
4 What about training?
Employees on furlough can spend time on training as long as the employee is not providing services to the salon or barbershop or generating any income for the salon or barbershop.
Time spent training is treated as working time. Employees must be paid at the appropriate NLW/NMW rate for their age for training time. You need to cover the difference between 80% of their wages and the NLW/NMW to make sure they are paid at the correct NLW/NMW rate.
Don’t forget the minimum wage rates went up on 1 April 2020.
5 What are the new minimum wage rates?
|New rate||Old rate|
|25 and over||£8.72||£8.21|
*An apprentice over the age of 19 who is in the second year of their apprenticeship must be paid the age-appropriate NMW/NLW.
6 How does this affect apprentices?
Apprentices can be furloughed in the same way as other employees. They can continue to train while furloughed as long as they are not providing services to the salon or barbershop or generating any income for the salon or barbershop.
But they must be paid the appropriate rate for all the time they spend training. You may need to cover the difference between 80% of their wages and the NLW/NMW to make sure they are paid at the correct NLW/NMW rate.
7 What if my apprentice was about to take an end-point assessment?
It’s likely to be postponed until at least June 2020. You will need to agree a new date with your training provider.
8 Where can I find more information about apprenticeships?