Government Guidance on the Coronavirus Job Retention Scheme

Added by Love Business East Midlands | 23 March 2020

UPDATED: 30 April 2020

Following the Chancellors update on Friday 20th March 2020, Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

 

On Saturday 4 April the government issued updated guidance for employers on claiming for employee wages through the new Coronavirus Job Retention Scheme, along with separate guidance for employees. Below we set out the key points from the updated guidance and then answer some of the frequently-asked questions about the scheme.

 

Hub Launch:  Coronavirus Job Retention Scheme - What you’ll need to make a claim

The Coronavirus Job Retention Scheme Hub has successfully launched and is easy to use. You just need to have everything you need prepared - take a look here at what you need to complete your claim and follow the link on this page to get straight to the login on the .gov site.

Last updated April 30th: Coronavirus Job Retention Scheme step-by-step guide for employers

 

• Government will help pay people's wages through a coronavirus job retention scheme

-  Businesses can apply for a grant of up to £2,500 a month to cover 80% of salary for those retained but not working

- Any employer in the country will be able to apply to HMRC for payments of up to £2,500 per worker per month

- The scheme will be open for three months initially but will be extended if required

Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak. Any employer in the country- small or large, charitable or non-profit will be eligible for the scheme. These will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.

 

• The scheme is “designed to help employers whose operations have been severely affected by coronavirus”

Employers that cannot maintain their current workforce because of the COVID-19 Crisis can make use of the scheme. Employers may be allowed some discretion, but they should not be abusing the scheme.  Importantly, the government has indicated that it will retain the right to retrospectively audit employers, with scope to claw back fraudulent or erroneous claims.

 

• HMRC are in the process of setting up an online portal to facilitate this and has not been actioned currently

As soon as Love Business News has the link to the HMRC online portal, we will add it ito this page. In the meantime any business facing cashflow issues, which will impact on their ability to pay staff put on furlough, are advised to take out a Coronavirus Business Interruption Loan.

 

How to access the Coronavirus Job Retention Scheme

 

You will need to:
 

• Designate affected employees as ‘furloughed workers' (furloughed simply means 'to grant leave of absence to') ‘Furlough leave’ is an entirely new concept and is a new class of indefinite leave where the Government reimburses the employer for wage costs

 

• Notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation

Basically, employers and employees will need to agree to the employee being designated as a ‘furloughed worker’.  This should be straightforward because this will no doubt be more attractive to employees than redundancy, lay off, unpaid leave or a reduction in pay. It's recommended employers send a letter or email to the employee concerned and get them to agree to the change in status in writing.

Employees cannot elect to be a furloughed worker without their employer’s agreement.

 

• Furloughed employees must have been on your PAYE payroll on 28 February 2020 - and can be on any type of contract, including:

- full-time employees
- part-time employees
- employees on agency contracts
- employees on flexible or zero-hour contracts

 

• Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

 

• HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers

 

• Do businesses have to 'top up' the pay to 100%?

No they don’t but they can choose to. This arrangement needs to be made clear to the employees concerned. It's highly recommend that you adopt a consistent approach - i.e. everyone gets the 80% or gets 'topped up'.

 

• What about employees that have already been dismissed or taken unpaid leave?

The scheme is backdated to 1st March 2020 and employers are urged by the Government to take back anyone they had already dismissed and convert them to this ‘Furlough leave’ instead.  Likewise with anyone who is on unpaid leave.

 

• If employees agree to work less hours they can't be on ‘Furlough leave'

There is currently no option to do a mixture of reduced hours and furlough leave.

 

• Employees will continue to accrue holiday and service

Any employees on ‘Furlough leave’ will remain on the employer’s payroll and will continue to accrue holiday and service.

 

• Employees will continue to be subject to usual income tax and other deductions

 

• If your employee is on unpaid leave

Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February.

 

• If your employee is on Statutory Sick Pay

Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

 

• If your employee is on unpaid leave

Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

Employees who are shielding in line with public health guidance can be placed on furlough.

 

• If your employee has more than one job

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

 

• Rotating furlough and other options

Some employers have work for some staff, but not enough work for all. One of the most pressing questions since the scheme was first announced was whether employees could rotate employees on furlough or if they would have to choose some employees to be furloughed while others stayed at work.

The latest guidance states that employees can be furloughed multiple times.  Each separate instance must be for a minimum period of three consecutive weeks (one period can follow straight after an existing furlough period) and when employees return to work, they must be taken off furlough. This indicates that employers can rotate employees on furlough, so long as each employee spends a minimum of three weeks on furlough.

 

• Can we make some people redundant and furlough others?

Yes. The guidance clearly says that you do not need to place all your employees on furlough. 

 

• Can we ask furlough employees to undertake training?

Yes. You can ask employees on furlough to undertake training or volunteer subject to public health guidance, as long as you’re not:

•     making money for your employer or a company linked or associated to your employer
•     providing services to your employer or a company linked or associated to your employer

If workers are required to, for example, complete training courses whilst they are furloughed, then they must be paid at least their appropriate minimum wage (NLW/NMW/AMW) for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

 

 'What can 'furloughed staff' do for the business whilst on leave? Watch the 4 minute 36 seconds  video debate podcast with Andrew Bridgen MP, and Chris Hobson, Director of Policy and External Affairs for East Midlands Chamber.

 

The British Chamber of Commerce FAQs on Coronavirus Job Retention Scheme

BCC has sought clarification from Ministers on the detail of the scheme and will update these FAQs as further information is obtained. See Coronavirus – Job Retention Scheme FAQS

The Government will issue more guidance on how employers should calculate their claims for Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions, before the scheme becomes live.

 

Hub Launch:  Coronavirus Job Retention Scheme

• HMRC are ready to launch on 20 April
• HMRC will be contacting businesses to advise them what they need to do
• HMRC is expecting phone demand to be beyond their capacity to offer a normal service. Therefore, the service is designed to be self-serve with guidance in place.

 

What you’ll need to make a claim

• To claim, you will need:

- your ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 weeks)
- your bank account number and sort code
- your contact name
- your phone number

Businesses will need the following information on each of their furloughed employees:
- National Insurance number
- Salary
- National Insurance contribution
- Pension contribution

 

• You will need to calculate the amount you are claiming

HMRC will retain the right to retrospectively audit all aspects of your claim.

 

• 3 weeks is the minimum length an employee can be furloughed for

You can only submit one claim for an employee which will be for a minimum 3 week period, which is the minimum length an employee can be furloughed for; or until the government ends the scheme; or any period in-between.

Claims can be backdated until the 1 March if applicable.

 

• What to do after you’ve claimed?

Once HMRC have received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account.

You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.

You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

 

Here's the link to the Government website about the Coronavirus Job Retention Scheme

PDF Download: Coronavirus Job Retention Scheme step-by-step guide for employers

 

Date available: Retrospectively from 1st March 2020

 

Application process: HMRC Coronavirus Job Retention Scheme Portal Sign-in

 

 

 

COVID-19 Business Support Hub

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