On 26 March, HMRC issued guidance on its Coronavirus Job Retention Scheme (CJRS). Initially announced on 20 March, it’s anticipated that the scheme will be accessible from the end of April.
All UK employees on the payroll on 28 February and covered under PAYE can access the CJRS, including those who work for charities, recruitment agencies and public authorities. However, public sector employers are not expected to apply, as central government continues to fund wage costs as usual. As regards agency workers, only those not working will be able to access the scheme.
Only furloughed employees, i.e. those who are not working at all, can be claimed for – those who continue to work reduced hours will not be eligible under the CJRS.
It’s the responsibility of employers to apply for assistance via an online portal, rather than that of individual employees. Each employer can reclaim up to 80% of wage costs up to a maximum of £2500 per month per employee, plus the related employer NI and minimum pension auto-enrolment contributions. On an optional basis, employers can claim for 100% of wage costs to be covered.
Claims can only be made once every three weeks and can be backdated to 1 March 2020.
Where the pay rate of an employee is variable, the employer can claim for whichever of the following is higher of their earnings for the month of March 2019, or their average monthly earnings over the tax year 2019/20.
If they are furloughed, employees are only entitled to the minimum wage for the hours they work, even if the 80% limit takes them below the national minimum wage based on their normal working hours.
Furlough leave can be rotated among employees, but each must not be working at all for a minimum three-week period in order to be eligible. Volunteering and training is permitted whilst furloughed. Employers must also be mindful of not discriminating against any employee when deciding who is to be furloughed.
Employees who have been made redundant since 28 February can be furloughed if rehired. Any employees currently on sick pay or self-isolating can only be furloughed when these periods end.
Employers are encouraged to discuss the issue of furloughing with their workforce and issue written confirmation of arrangements as they are agreed.
We are helping many clients with this approach as it enables organisations to protect their employees’ jobs whilst putting plans in place for protecting the ongoing viability of the business. If you would like help in this area please don’t hesitate to contact us.
