IMPORTANT UPDATE: COVID-19

The Coronavirus Job Retention Scheme (“CJRS”) – otherwise known as furlough leave, is part of a package of measures introduced by the Government to support public health, business and employees through the Coronavirus crisis.

The situation is changing rapidly and this article is based on the further details of the Coronavirus Job Retention Scheme which were issued on 26th March 2020.

  • Any employer which has a UK bank account and which started a PAYE payroll scheme on or before 28th February 2020 can apply to put workers on “furloughed” status.
  • The government will then pay them cash grants by way of HMRC re-imbursement of 80 per cent of their wage costs up to a cap of £2,500 as long as the employee stays employed.
  • The employer can top up the 80% to full pay. If they don’t, they need to agree with the employee a variation in the employment contract to reduce pay. Please contact us for further details.
  • The scheme is to run for 3 months starting from 1st March 2020 but may be extended.
  • There is no limit on the amount a single employer can claim under the scheme.
  • Payments are currently expected to start in April.

The Government published an update on the Coronavirus Job Retention Scheme on 3 April 2020, clarifying a number of areas that has given rise to questions. The guidance can be seen here but some of the main points to note are:-

  • Apprentices can be furloughed.
  • Company directors can be furloughed.They can comply with their statutory duties whilst furloughed but cannot do any other work.Specific procedures must be followed to record the furlough.
  • You can only claim for furloughed employees that were on your payroll on or before 28 February 2020.
  • Employees can be on any type of contract, including zero hours contracts.
  • Tax and National Insurance deductions will continue to be made.
  • Employees who were made redundant or stopped working for you after 28 February can be re-employed, furloughed and a claim made under the Scheme.
  • An employee can be furloughed for one job and still receive normal wages for another job.
  • Employers must confirm in writing to their employees that they have been furloughed and keep the record for 5 years.
  • Claims start when the employee finishes work and starts furlough, not when the decision is made.
  • You can claim for regular payments that you are obliged to make to your employees e.g. past overtime and compulsory commissions. Benefits in kind are not included.
  • Employees still have the same rights at work, such as maternity and other parental rights.
  • Information is now given on how to claim.

qUESTIONS

Will the grant cover the employer National Insurance contributions and pension contributions?

Answer - Yes

What will those on zero-hour contracts be paid?

Answer - It appears that the grant will pay the higher of: (1) the earnings in the same pay period in the previous year; or (2) the average earnings in the whole previous 12 months (or fewer if they have worked for less time)

If I furlough someone now, can I claim their wages for the whole of March?

Answer – No, the scheme does not cover periods where the employee has been working.

What if I laid off or made someone redundant due to coronavirus this month before the scheme was announced?

Answer – the scheme is backdated to March 1 to cover these employees. You will need to agree with the employee to re-employ them if they were made redundant after 28th February 2020 before placing on furlough.

Employees laid off or made redundant since 28th February for a reason not connected with coronavirus are likely to be excluded

Can I make someone redundant if they’re on furlough?

Answer Yes, normal employment law rules apply. Be aware that notice pay is likely to be based on normal rates of pay

Can I rota my staff for a short time then bring them back to work?

Answer No, an employee must be furloughed for a minimum of 3 weeks for their employer to be allowed to claim.

Can employees still do training whilst furloughed?

Answer – Yes

An employee I’ve furloughed has pre-booked holidays. What do I pay them?

Answer – It is likely you’ll need to pay their full 100% salary

CONTACT US

To discuss Employment issues, please either use the contact form on the right, email us at info@ramsdens.co.uk or call us on 01484 821 500 to speak to a member of our team.