Coronavirus Job Retention Scheme – Further Guidance
Further guidance on the Government’s Coronavirus Job Retention Scheme has now been announced giving us greater clarity on how the scheme will operate. Below we have set out some common questions we have been asked so far with some answers we can now give.
Who is eligible to use the retention scheme?
As an employer, you will only be eligible to use the scheme if you had a PAYE Scheme in place on or before 28 February 2020. This includes those in the public sector and charities. Any employee that you wish to furlough must have been placed on the payroll before this date. Any employee employed later than 28 February will not be eligible.
What are the requirements for furlough?
The payments can be recovered as a grant from the Government in minimum blocks of three weeks. So, an employee should be on furlough for a minimum of three weeks. During this time an employee must not work at all, or they will not be eligible. This does not include training and volunteer work, as long as no income is generated for their employer.
Employees in self-isolation or on sick-pay cannot be furloughed until they recover and are ready to work again. At that point they can be furloughed. Those who are ‘shielding’ (i.e. vulnerable people who are minimising contact with others) as opposed to being sick can be furloughed.
Will agency workers be included?
Agency workers will be eligible, as long as they are not working. Anybody who was on the payroll on 28 February and has since been made redundant can be rehired and put on the scheme.
What can I claim?
An employer can claim 80% of the wage costs of an employee up to a maximum of £2,500. Any bonuses or commission payments are not included in this. On top of this amount, employers can also claim the associated National Insurance and minimum pension contributions on that wage. It is up to employers as to whether they want to top up wages above this amount.
How do I claim?
Employers will be able to claim from HMRC through an online portal. You can only claim once every 3 weeks, and these claims can be backdated to 1 March 2020. Further guidance on the mechanics of how this works is expected to follow shortly.
Are there any potential problems in implanting furlough?
When agreeing a change in hours and/or acceptance of 80% pay, the current employment law already in place will apply. This could mean potential issues where agreement cannot be reached and / or where there is the potential for discrimination. Employers must ensure the implementation of furlough is done correctly and lawfully.
If you are considering using the Government’s Job Retention Scheme and require further information, or to discuss the issues raised by this article, please contact Herrington Carmichael’s Employment Department on 0118 977 4045 or firstname.lastname@example.org.
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.
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