[UK] Things for payroll departments to consider when furlough ends

[UK] Things for payroll departments to consider when furlough ends
07 Sep 2021

The furlough scheme was introduced in March 2020 as a short term measure to support employers paying their employees during the COVID-19 pandemic. The scheme has been extended several times - in the March 2021 budget it was extended until the end of September - but its end date is now approaching. The HR Director breaks down the hard work payroll teams have ahead of them.

Such a disruptive year will inevitably lead to lots of changes to contracts of employment on October 1 when workers return. Some staff will want or need to change from full time to part-time hours. In some cases, changes to a business will need to have reflected in changes to contracts. These are all challenges that a business and its payroll department will need to address.

There is no minimum notice period in place for bringing employees back from furlough but obviously, it is good practice for businesses to start having conversations with staff as soon as possible because if contracted hours or other aspects of an employee’s contract have changed there are likely to be issues to address and concerns to talk through.

Beyond furlough

In addition to the end of furlough, other changes to employment legislation might have arisen that organisations will need to be made aware of over the coming months. Any employee at risk of redundancy while on maternity, or adoption, or shared parental leave, already has the right to be offered any suitable alternative vacancy that is available. But the government is proposing to extend this protection to pregnant employees once they have told their employer of their pregnancy; as well as to employees returning from maternity, or adoption leave within the previous six months, and parents returning from shared parental leave.

Delivering on all of these changes demands a high level of pre-planning. HR and payroll teams alike need to be fully aligned with the business so that they can be up to speed with the likely changes and prepare for the upcoming furlough cut-off date and the broader changes in employment legislation to come.

Being prepared

In terms of pre-planning, The HR Director says payroll teams will inevitably have a host of challenges to navigate in the run-up to furlough and beyond. First and foremost, something that is easier said than done, all employers will need to ensure that they have the correct details in place for staff who have been furloughed. They need to be aware and have recorded if people have changed their working hours, their holiday agreements, or if any changes have been made to their contracts. All this will need to be updated in the payroll system.

Modern payroll systems can also increasingly be date-tracked, enabling payroll departments to make changes ahead of time. Teams can enter the relevant data in the system before changes take place and conduct a trial run of the payroll system ahead of time to ensure the data is correct. In other words, they can get ahead of the changes and do preparatory work before people return from furlough, or move onto a new contract.

The employee dimension

This kind of streamlined efficiency is key not only from the perspective of the business and the payroll department in isolation but also in terms of how it positively impacts the employee experience. When employees return, it is critical that everything is 100 per cent correct because any mistakes will have a negative effect on employee morale. If people are returning to a different world from the one they left, potentially 18 months ago, payroll teams and the businesses they work for have a responsibility to make the transition back as simple and pain-free as possible. Employees need to feel that their re-entry into the workforce is a seamless and normal experience. And payroll teams need to help in that process by getting everything right for them from the get-go.

Preparing for furlough’s end

So, as they prepare for the end of furlough, The HR Director asks what the top priorities facing payroll teams are? Ultimately, good communication is always key. It is important that furloughed staff understand what payroll and the wider business will be doing for them to ensure a smooth transition back into the workplace, supporting the business’ desire to provide an enhanced employee experience for those returning.

Ongoing process

These requirements are not a one-time thing for payroll; they are part of an ongoing process. The UK government recently reported that it has protected 11.6 million jobs through the furlough scheme. And at first, it made an 80 per cent contribution to the programme. But in July 2021, the contribution was reduced down to 70 per cent and it was reduced again in August to 60 per cent. Payroll teams have already had to flex to meet those changes, making the latest changes part of an evolving process rather than an isolated requirement.

Payroll teams have also already been mapping to businesses’ requirements, with many organisations choosing to top up the 80 per cent originally provided by the government to furloughed employees in the first instance and turning into 100 per cent. So change is nothing new for payroll teams who have come through the pandemic yet it remains a critical priority that they get everything right for a business and its employees and that they get it right first time. 

Looking ahead, it will continue to be crucial that payroll teams remain flexible and adaptable and prepare for ongoing change in this time of uncertainty. With COVID still a challenge, the possibility of furlough returning in the future can never be fully ruled out.

Many businesses have made changes to their payroll systems through the global pandemic to incorporate furlough and give all the relevant information to their staff. They need to ensure that they keep this in place and retain everything that has been set up in case they need to use it again. These remain busy times for payroll but as always being well prepared is at least half of the battle.


Source: The HR Director

The furlough scheme was introduced in March 2020 as a short term measure to support employers paying their employees during the COVID-19 pandemic. The scheme has been extended several times - in the March 2021 budget it was extended until the end of September - but its end date is now approaching. The HR Director breaks down the hard work payroll teams have ahead of them.

Such a disruptive year will inevitably lead to lots of changes to contracts of employment on October 1 when workers return. Some staff will want or need to change from full time to part-time hours. In some cases, changes to a business will need to have reflected in changes to contracts. These are all challenges that a business and its payroll department will need to address.

There is no minimum notice period in place for bringing employees back from furlough but obviously, it is good practice for businesses to start having conversations with staff as soon as possible because if contracted hours or other aspects of an employee’s contract have changed there are likely to be issues to address and concerns to talk through.

Beyond furlough

In addition to the end of furlough, other changes to employment legislation might have arisen that organisations will need to be made aware of over the coming months. Any employee at risk of redundancy while on maternity, or adoption, or shared parental leave, already has the right to be offered any suitable alternative vacancy that is available. But the government is proposing to extend this protection to pregnant employees once they have told their employer of their pregnancy; as well as to employees returning from maternity, or adoption leave within the previous six months, and parents returning from shared parental leave.

Delivering on all of these changes demands a high level of pre-planning. HR and payroll teams alike need to be fully aligned with the business so that they can be up to speed with the likely changes and prepare for the upcoming furlough cut-off date and the broader changes in employment legislation to come.

Being prepared

In terms of pre-planning, The HR Director says payroll teams will inevitably have a host of challenges to navigate in the run-up to furlough and beyond. First and foremost, something that is easier said than done, all employers will need to ensure that they have the correct details in place for staff who have been furloughed. They need to be aware and have recorded if people have changed their working hours, their holiday agreements, or if any changes have been made to their contracts. All this will need to be updated in the payroll system.

Modern payroll systems can also increasingly be date-tracked, enabling payroll departments to make changes ahead of time. Teams can enter the relevant data in the system before changes take place and conduct a trial run of the payroll system ahead of time to ensure the data is correct. In other words, they can get ahead of the changes and do preparatory work before people return from furlough, or move onto a new contract.

The employee dimension

This kind of streamlined efficiency is key not only from the perspective of the business and the payroll department in isolation but also in terms of how it positively impacts the employee experience. When employees return, it is critical that everything is 100 per cent correct because any mistakes will have a negative effect on employee morale. If people are returning to a different world from the one they left, potentially 18 months ago, payroll teams and the businesses they work for have a responsibility to make the transition back as simple and pain-free as possible. Employees need to feel that their re-entry into the workforce is a seamless and normal experience. And payroll teams need to help in that process by getting everything right for them from the get-go.

Preparing for furlough’s end

So, as they prepare for the end of furlough, The HR Director asks what the top priorities facing payroll teams are? Ultimately, good communication is always key. It is important that furloughed staff understand what payroll and the wider business will be doing for them to ensure a smooth transition back into the workplace, supporting the business’ desire to provide an enhanced employee experience for those returning.

Ongoing process

These requirements are not a one-time thing for payroll; they are part of an ongoing process. The UK government recently reported that it has protected 11.6 million jobs through the furlough scheme. And at first, it made an 80 per cent contribution to the programme. But in July 2021, the contribution was reduced down to 70 per cent and it was reduced again in August to 60 per cent. Payroll teams have already had to flex to meet those changes, making the latest changes part of an evolving process rather than an isolated requirement.

Payroll teams have also already been mapping to businesses’ requirements, with many organisations choosing to top up the 80 per cent originally provided by the government to furloughed employees in the first instance and turning into 100 per cent. So change is nothing new for payroll teams who have come through the pandemic yet it remains a critical priority that they get everything right for a business and its employees and that they get it right first time. 

Looking ahead, it will continue to be crucial that payroll teams remain flexible and adaptable and prepare for ongoing change in this time of uncertainty. With COVID still a challenge, the possibility of furlough returning in the future can never be fully ruled out.

Many businesses have made changes to their payroll systems through the global pandemic to incorporate furlough and give all the relevant information to their staff. They need to ensure that they keep this in place and retain everything that has been set up in case they need to use it again. These remain busy times for payroll but as always being well prepared is at least half of the battle.


Source: The HR Director

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