The government has issued further guidance on the details of the Coronavirus Job Retention Scheme.
The key points are:
- The scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020
- To be eligible, the employee must have been on the payroll on 28 February 2020. If they were hired later, they are not eligible. Anybody who was on the payroll on 28 Feb and has since been made redundant can be rehired and put on the scheme
- Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding
- The guidance does not appear to prohibit rotating furlough leave amongst employees, provided 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 an hour, they are not eligible. However, they are able to undertake training and do volunteer work, provided they do not provide services to or make any money for their employ
- 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 on that wage. Fees, commissions and bonuses are not included
- Employers can only claim once every three weeks
- Claims can be backdated to 1 March 2020
- An employer can choose to top up to 100%, but does not have to (subject to any contractual rights)
- For employees whose pay varies, the employer can claim for the higher of:
- The same month’s earning from the previous year (e.g. earnings from March 2019); or
- Average monthly earnings in the 2019-20 tax year
- Individuals are only entitled to the minimum wage for the hours they work
When agreeing changes in hours (and acceptance of 80% pay), employers must be careful not to discriminate in deciding who to offer furlough to. It is likely that prioritising vulnerable workers will not be deemed to be discrimination, prioritising the over 70s is almost certainly justifiable; however, you should still be cautious and make sure you keep records of all discussions. Those who do not suffer from serious health conditions are not a protected class - Employees on sick pay or self-isolating cannot be furloughed, but can be furloughed afterwards. Employees who are shielding can be placed on furlough
- Employees on maternity (or similar) leave can continue to receive statutory or company leave payments. The guidance does not prohibit women on maternity leave agreeing to return to work early and then being furloughed or electing to change to shared parental leave and then being furloughed.
Although this is only guidance and not legislation as yet, it is expected that this is what HMRC will use when making decisions.
The government is expected to provide information on how employers will be able to claim the payment in due course however, it is expected the scheme will be up and running by the end of April.