HMRC has confirmed its fourth set of updates of the Coronavirus Job Retention Scheme.
The qualifying date, when an employee has to have been on the employer's payroll, has changed from 28 February to 19 March 2020.
Briony McDermott, employment solicitor at Wake Smith Solicitors looks at the updated details of the scheme.
“The date change brings a large number of people who previously fell outside the scheme, because they had recently changed jobs, into line.
“The 19 March date is just before the Chancellor announced details of the scheme, meaning it is still effective to prevent fraudulent claims (by businesses hiring ghost employees to claim furlough payments in respect of, as those ghost employees will not have been on PAYE on 19 March).”
The Coronavirus Job Retention Scheme was introduced as a result of the COVID-19 pandemic.
To summarise:
- 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 19 March 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 with the affected employees. 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.
Briony added: “The online service that businesses will use to claim is not available yet. It is expected to be available by the end of April 2020.
“This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period.”
For further information on other initiatives visit www.gov.uk.
For any employment queries contact Briony McDermott at Wake Smith on 0114 266 6660.
