Government Guidance on the Coronavirus Job Retention Scheme

Added by Love Business East Midlands | 23 March 2020

UPDATED: 27 March 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.

This information was last updated Friday March 27th

• 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.

• 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.

CoLaw Employment Law Consultant, Louise Barnes was part of a feature surrounding the Furlough Agreement and the impact it might have - discussing a lot of pros and cons. If you're wanting to know more about the Furlough Agreement and how this could help your business, then ggive this a listen on BBC Sounds App.

>> Skip ahead to 02:07:00 to listen to the full feature!

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.

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.

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

• 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

Date available: Retrospectively from 1st March 2020

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

COVID-19 Business Support Hub

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