Coronavirus Job Retention Scheme - further details announced
The Government has now published additional information about Coronavirus Job Retention Scheme (the Furlough Scheme). At present the details represent guidance for HMRC; whether legislation follows remains to be seen.
We recommend you read the full guidance here however the main points are:
- the Coronavirus Job Retention Scheme is open to all UK employers with a PAYE scheme in place on 28 February 2020
- employers can reclaim up to 80% of their wage costs (up to a maximum of £2,500 pcm), as well as associated employer National Insurance Contributions and minimum autoenrolment pension contributions. The Scheme does not include fees, commissions or bonuses.
- any organisation with employees can apply. This includes charities, agencies (with employees who are not working) and public bodies. The Government is not expecting public sector employers to use the scheme as central government continues funding wages in the normal way.
- employers can choose to top up wages to 100%, although they do not have to - this is subject to employment law and the renegotiating of contractual entitlements, where these are applicable
- where the pay of employees varies, employers can claim for the higher of figures:
- the same month's earning from the previous year
- average monthly earnings in the 2019-20 tax year
- to be eligible, employees must have been on the payroll on 28 February 2020. Staff who were on the payroll on that date but have since been made redundant can be rehired and put on the scheme
- employees will only be entitled to the minimum wage for the hours they work. This includes time spent training.
- to be eligible for funding, furlough leave must be taken in minimum blocks of 3 weeks. Employers can rotate furlough leave amongst their staff as long as each employee is off work for a period of at least 3 weeks. Employers can only claim once every 3 weeks and claims can be backdated to 1 March 2020.
- the employee must not be working in any way during their entire three week furlough period). However, they may undertake training or carry out volunteer work
- Employers must be mindful of discriminating when deciding who to offer furlough to. Prioritising vulnerable workers should be justifiable.
- employees who are self-isolating or claiming sick pay cannot be furloughed, however, staff who are shielding can be placed on furlough.
- staff on maternity (or similar) leave may continue to draw SMP (or similar) payments.
The Government has stated that it expects the scheme to be running by the end of April 2020.
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