The Government has now published further guidance in relation to the Coronavirus Job Retention Scheme.
In her latest article to help businesses understand the help being offered by the Government, Briony McDermott looks at the key points:
- The scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020.
- Any organisation with employees can apply, including charities, recruitment agencies and public authorities. With agency employees, the scheme is only available for agency employees who are not working.
- Employers can reclaim up to 80% of wage costs up to a cap of £2,500 per month, plus (not including) the associated employer NICs and minimum auto enrolment pension contributions. The scheme will not cover bonuses and commission.
- Employers can choose to top up the wages to 100% (i.e. pay the additional 20%), but is not obliged to do so.
- For employees whose pay varies, the employer can claim for the higher of either the same month's earning from the previous year; or the average monthly earnings in the 2019-20 tax year.
- Furloughed individuals are only entitled to the minimum wage for the hours they actually worked. So, if they are furloughed and do not work, and 80% of their normal earnings would take them below the national minimum wage they still only receive 80%.
- The employee must have been on the payroll on 28 February 2020. Anybody who was on the payroll at that date and has since been made redundant can be rehired and furloughed.
- Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding. There is nothing in the guidance which prohibits rotating furlough leave amongst employees, as long as each employee is off for a period of at least three weeks.
- The employee must not be working at all. If they work for even a couple of hours during the furlough period they are not eligible. However, the employee can undertake training and do volunteer work, provided they do not provide services to or make any money for their employer
- When agreeing changes in hours (and pay), normal employment law applies and any changes must be agreed in writing with the affected employees to avoid the risk of any claims of breach of contract and constructive unfair dismissal. The employer must also be careful not to discriminate in deciding who to offer furlough to.
- Employees who are off sick or self-isolating cannot be furloughed, but can be furloughed once their sickness or self-isolation ends. Employees who are shielding can be placed on furlough.
- Employers can only claim once every three weeks, i.e. they cannot get weekly reimbursement. Claims can be backdated to 1 March 2020 and currently the scheme is in place until 31 May 2020, however this may be extended.
The government will issue further guidance on the portal which is currently being set up to reclaim the payment in due course. It says it expects the scheme will be fully up and running by the end of April.
The full guidance is available on the gov.uk website.
For advice on employment matters contact Briony McDermott at [email protected]
