Coronavirus: Your workplace questions

Furlough and Salary Sacrifice.

Hello all. I wonder if you could help me clarify some confusion that has crept into a discussion we've had today.

A member of the management team thinks that, for the purposes of furloughing a member of staff, any salary sacrifice arrangements are automatically suspended. So members of our staff who are opted into salary sacrifice for their pension contributions will see a decrease in their employer pension contributions during the period of furlough and this manager thinks their net pay will remain the same.

From what I'm reading online I think the salary sacrifice arrangements will continue on the employee's behalf and aren't automatically suspended. So the employee's gross pay will still be less than a colleague who is paid at the same rate but has not entered into the salary sacrifice. If we, the employer isn't making the additional pension contributions during the period of furlough then without the employee opting-out (which they can do as Covid-19 qualifies as a Life Event) then they will be at a small financial disadvantage next to colleagues not in the scheme or if they'd never opted in to salary sacrifice always having taken their salary as cash.

Even if the employer wants to top up the 80% during furlough, which is very generous and will be well received, should we not still be offering the opt-out of salary sacrifice as best practice to employees?

Any advice on this would be welcome.

JJ

Salary sacrifice is a permanent change to conditions and therefore doesn't automatically stop. HMRC have said however you can treat furlough as a life event and therefore offer option.

Salary sacrifice is a permanent change to conditions and therefore doesn't automatically stop. HMRC have said however you can treat furlough as a life event and therefore offer option.