What does Furlough mean and how does this affect minimum wages, training and apprenticeships
Government information regarding employment in the hair, barber and beauty industry is being consistently updated and here the NHBF provide the latest answers to the most frequently asked questions about training, minimum wage and apprentices.
- 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?
25 and over: New rate = £8.72. Old rate= £8.21.
21-24: New rate = £8.20. Old rate= £7.70
18-20: New rate = £6.45. Old rate= £6.15
Under 18: New rate = £4.55. Old rate= £4.35
Apprentices*: New rate = £4.15. Old rate= £3.90
*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 my 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 you must pay them at 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?
- For more details about the information given above and the coronavirus job retention scheme see the NHBF coronavirus hub here, and follow the National Hair & Beauty Federation on social @nhbfsocial.