New Job Support Scheme / Job Retention Scheme FAQs

Review of extended CJRS at end of Jan 2021:  While the extended CJRS will run from 1 November to 31 March 2021, the new Treasury Direction will only apply in its current form until 31 January 2021, when the operation of the Extended CJRS is due to be reviewed.

Employers cannot claim for redundancy notice periods:  Unlike the previous CJRS, from 1 December 2020, employers can no longer claim a grant under the extended CJRS for any day that an employee is serving contractual or statutory notice (this applies whether an employee has been dismissed, has resigned or is retiring).  However, employers can continue to claim for affected employees during a redundancy consultation process before notice is given.

After 30 November, employers will not be able to submit any further claims or add to existing claims for periods ended on or before 31 October 2020:  CJRS claims for periods ended on or before 31 October 2020 should be submitted, and any underclaims corrected, by 30 November 2020. Employers should therefore prioritise preparation and review of claims for periods up to and including 31 October 2020 to confirm whether any corrections or notifications are required by 30 November.

The following letter templates may be of use when seeking employees’ agreement to full or flexible furlough under the extended CJRS.

Extended CJRS Full Furlough Letter-MNI

Extended CJRS Flexible Furlough Letter- MNI

• The CJRS will be extended until 31 March 2021. 

• Employers across the UK can claim, whether their businesses are open or closed. We therefore assume that the extension will apply across all areas, regardless of their alert level. (Note however, that the announcement does indicate that further details will be published next week about which employers are eligible).

• Employers do not need to have used the CJRS previously and employees do not need to have previously been furloughed to be eligible.  However, employees must have been employed and on the employer’s PAYE payroll on 30 October 2020 (although see the point below regarding employees who have recently left employment).

• Significantly, employees who were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for – if you have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees. Similarly, employers can re-employ and claim for an employee who was on a fixed term contract, on payroll on 23 September, whose contract expired after 23 September, provided that the other eligibility criteria are met.

• To be eligible for the grant under the extended CJRS, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed.

• Provided it is consistent with employment law and is made in accordance with the conditions set out in the policy paper on or before 13 November, a flexible furlough or full furlough agreement can be made retrospectively to have effect from 1 November 2020.

• Employees who are furloughed will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.

• Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase their contributions.

• Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.

• For employees who were previously eligible for the CJRS, the calculation rules will remain the same as under the CJRS prior to 31 October.

• If an employee was not previously eligible for CJRS, 80% of wages must be calculated as follows:
• employees on a fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020
• employees whose pay varies – 80% of the average payable between (these dates are inclusive) the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins

• Employees can be furloughed where they are unable to work because they:
  • are shielding in line with public health guidance (or need to stay at home with someone who is shielding); or
  • have caring responsibilities resulting from coronavirus, including employees that need to look after children.

• The extended CJRS will operate as the previous scheme did, with businesses being able to claim either shortly before, during or after running payroll. Claims can be made from 8am Wednesday 11 November. Claims made for November must be submitted to HMRC by no later than 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.

• The Job Retention Bonus (JRB) will not be paid in February and the Government has stated that it will redeploy a retention incentive at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the CJRS is being extended to the end of March 2021, the policy intent of the JRB falls away.

• The launch of the Job Support Scheme has been postponed because of national developments related to the Coronavirus pandemic.

https://www.gov.uk/government/news/furlough-scheme-extended-and-further-economic-support-announced

Job Retention Scheme

Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme, which will continue for a further month.

Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.

Additional guidance will be set out shortly.

• This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. There will be a short period when we need to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
• The CJRS is being extended until December. The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work.
• As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing.
• Further details, including how to claim this extended support through an updated claims service, will be provided shortly.
• The Job Support Scheme will be introduced following the end of the CJRS.

Who is eligible?

Employers

• All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
• The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

Employees

• To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
  *As under the current CJRS rules:
• Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
• Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
• When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
• Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
• For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

What support is being provided and employer costs:

• For hours not worked by the employee, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
• Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way.
• As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
• The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.

 The Job Support Scheme provides different types of support to these businesses so they can get the right assistance, at the right time, according to their situation.

JSS Open -Businesses that are operating but facing decreased demand can get support for wages through JSS Open.

JSS Closed – Those businesses that are legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK can get the support they need through JSS Closed.

The scheme will open on 1 November 2020 and run for 6 months, until April 2021.

Many employers can operate safely but continue to face reduced demand so they may need extra support over the winter to help keep their employees attached to their workforce. For these employers, the Job Support Scheme, through JSS Open, will give employers the option of keeping their employees in a job on shorter hours rather than making them redundant.

Employers will be able to access the Job Support Scheme if:

• they have enrolled for PAYE online
• they have a UK, Channel Island or Isle of Man bank account

Employers facing decreased demand can claim JSS Open.  In addition to the general Job Support Scheme eligibility criteria employers are eligible to claim the JSS Open if:

• an employer with 250 or more employees on 23 September 2020 has undertaken a Financial Impact Test demonstrating their turnover has remained equal or fallen to show they have been adversely affected due to coronavirus; an employer with less than 250 employees on 23 September 2020 is not required to satisfy the test
• some, or all, of their employees are working reduced hours – employees must still be working for at least 20% of their usual hours

Employers will be able to access the Job Support Scheme if:

• they have enrolled for PAYE online
• they have a UK, Channel Island or Isle of Man bank account

This scheme is available to those employers who have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK. For these businesses, the Job Support Scheme, through JSS Closed, will help them through the period that they are directly affected by these restrictions by supporting the wage costs of employees who have been instructed to cease work in eligible (closed) premises.

Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish . This will help protect employee incomes, limit unemployment and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.

Employees may also be entitled to additional financial support, including Universal Credit.

Large employers claiming JSS Open, defined as a legal entity with 250 or more employees across their payrolls on 23 September 2020, need to complete a Financial Impact Test to evidence that their income has been impacted due to coronavirus. If the employer’s turnover has remained equal or has decreased compared to the previous year, then they will qualify. This test only needs to be taken once before the employers first claim for the Job Support Scheme.

Large employers who are VAT registered and submit quarterly VAT returns, should compare the total sales figure on their VAT return, which is due to be filed and paid between 31 August 2020 and 7 November 2020, with the total sales figure from the same quarter in 2019. This is the figure recorded in box 6 of their VAT return, which captures the total value of sales and all other outputs excluding any VAT. This box captures all sales, whether subject to VAT or not.

Large employers who submit monthly VAT returns should compare the three consecutive months which are due to be filed and paid by 7 November 2020 with the same period in 2019.

Large employers who file less frequently should compare the three consecutive months which are due to be filed and paid by 7 November 2020 with the same period in 2019 but will need to have submitted a VAT return between 31 August 2020 and 7 November 2020 to be eligible.

Large employers who are part of a VAT group will use the turnover figures for the VAT group for this calculation.

Any charity with 250 or more employees that is registered with a UK charity regulator or are exempt from such registration will not be required to carry out the test and are eligible for this scheme.

Further guidance for large employers who are not VAT registered will be available by the end of October.

Examples of doing a financial impact test

Employers who submit quarterly VAT returns:

1. Take the box 6 turnover figure from the return with a filing due date between 31 August 2020 and 7 November 2020.
2. Take the box 6 turnover figure from the equivalent return in the 2019 year to that used in step 1.
3. If the step 1 figure is equal to or lower than the step 2 figure, then employers are eligible to claim the Job Support Scheme, provided they meet the other employer eligibility criteria, for eligible employees.

Example:

1. The VAT return for the quarter ended 31 July 2020, with a filing due date of 7 September 2020, has a box 6 figure of £2.34bn.
2. The VAT return for the quarter ended 31 July 2019, with a filing due date of 7 September 2019, has a box 6 figure of £1.72bn.
3. The step 1 figure is higher than the step 2 figure, so the employer is not eligible to claim the Job Support Scheme for eligible employees.

Employers who have changed their quarterly VAT stagger:

1. Take the box 6 turnover figure from the return with a filing due date between 31 August 2020 and 7 November 2020.
2. Take the box 6 turnover figure from the return with a filing due date between 31 August 2019 and 7 November 2019.
3. If the step 1 figure is equal to or lower than the step 2 figure, then employers are eligible to claim the Job Support Scheme, provided they meet the other employer eligibility criteria, for eligible employees.

Example:

1. The VAT return for the quarter ended 30 September 2020, with a filing due date of 7 November 2020, has a box 6 figure of £925m.
2. The VAT return for the quarter ended 31 July 2019, with a filing due date of 7 September 2019, has a box 6 figure of £925m.
3. The step 1 figure is equal to the step 2 figure, so the employer is eligible to claim the Job Support Scheme.

Employers who submit monthly VAT returns:

1. Add the box 6 turnover figures from the three consecutive monthly returns ending with a filing due date of 7 November 2020.
2. Add the box 6 turnover figures from the three consecutive monthly returns ending with a filing due date of 7 November 2019.
3. If the step 1 figure is equal to or lower than the step 2 figure, then employers are eligible to claim the Job Support Scheme, provided they meet the other employer eligibility criteria, for eligible employees.

Example:

1. The VAT returns for the months ending 31 July, 31 August, and 30 September 2020, which has a filing due date of 7 November 2020, have box 6 turnover figures of £100m, £120m and £110m. The total is £330m.
2. The VAT returns for the months ending 31 July, 31 August, and 30 September 2019, which has a filing due date of 7 November 2019, have box 6 turnover figures of £80m, £90m, and £160m. The total is £330m.
3. The step 1 figure is equal to the step 2 figure, so the employer is eligible to claim the Job Support Scheme for eligible employees.

Financial Impact Test for employers who have changed from quarterly to monthly VAT returns:

1. Add the box 6 turnover figures from the three consecutive monthly returns ending with a filing due date of 7 November 2020.
2. Take the box 6 turnover figure from the quarterly return with a filing due date between 31 August 2019 and 7 November 2019.
3. If the step 1 figure is equal to or lower than the step 2 figure, then employers are eligible to claim the Job Support Scheme, provided they meet the other employer eligibility criteria, for eligible employees.

Example:

1. The VAT returns for the months ending 31 July, 31 August, and 30 September 2020, which has a filing due date of 7 November 2020, have box 6 turnover figures of £180m, £90m, and £260m. The total is £530m.
2. The VAT return for the quarter ended 31 August 2019, with a filing due date of 30 September 2019, has a box 6 figure of £640m.
3. The step 1 figure is lower than the step 2 figure, so the employer is eligible to claim the Job Support Scheme.

There are a number of conditions that apply to all employers using the Job Support Scheme. The conditions apply to all employers claiming JSS Open and JSS Closed unless stated.

Redundancy: Employers cannot claim for an employee who has been made redundant or is serving a contractual or statutory notice period during the claim period.

Shareholder distributions: The government expects that large employers (250 or more employees) and their corporate groups using the scheme will not make capital distributions whilst claiming the Job Support Scheme grant. This includes:

• dividend
• charge
• free or other distribution
• any equivalent payment that a partnership may make to its partners

The government does not plan to make this expectation a contractual or legal condition of the scheme but encourages business to reflect on their responsibilities and that taxpayers should be able to rely on public money only being claimed where it is clearly needed.

Paying employee taxes and pension contributions:  The Job Support Scheme grant will not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer.  Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.

Employers must also pay to HMRC any employer NICs due on the full amount that that is paid to the employee, including any amounts subsequently met by a scheme grant.

Employers must report these payments via a Full Payment Submission (FPS) to HMRC on or before the pay date in the normal way.

Employers and Employees must also still pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension. If applicable Student Loan deductions and the Apprenticeship Levy must also still be paid.

Grant monies must only reimburse sums already paid to the employee: Employers must have paid the full amount claimed for an employee’s wages to the employee before each claim is made. They should also pay the associated employee tax and employee and employer National Insurance contributions to HMRC, even if the company is in administration.

Employers cannot enter into any commitment or transaction with the employee which would reduce wages below the amount claimed (for example a salary sacrifice scheme). This includes any administration charge, fees or other costs in connection with the employment. Where an employee had authorised their employer to make deductions from their net salary, these deductions can continue while the employee is working reduced hours provided that these deductions are not administration charges, fees or other costs in connection with the employment (for example, pension contributions and charitable giving).

Employees will be able to check if their employer has made a Job Support Scheme claim relating to them via their Personal Tax Account (sign up on GOV.UK).

Eligible employers will be able to claim the Job Support Scheme grant for employees who were on their PAYE payroll between 6 April 2019 and 11:59pm on 23 September 2020. This means an RTI Full Payment Submission notifying payment in respect of that employee must have been made to HMRC at some point from 6 April 2019 up to 11:59pm 23 September 2020.

Employers can only claim for employees that were in their employment on 23 September 2020. If employees ceased employment after 23 of September 2020 and were subsequently rehired, then employers can claim for them.

An individual is an employee for the purposes of this scheme if they are treated as an employee for Income Tax purposes.

Employees can be on any type of contract, including zero hours or temporary contracts.

Agency workers are regarded as employees of an employment agency for the purposes of this scheme, provided they are employees for Income Tax purposes.

Employees do not need to have been furloughed under the Coronavirus Job Retention Scheme to be eligible for the Job Support Scheme.

Employers will be able to top up employee wages above the level of minimum contributions at their own expense if they wish.

Employers cannot claim both JSS Open and JSS Closed in respect of a single employee for the same day.

Employers using the Job Support Scheme will also be able to claim the Job Retention Bonus if they meet the eligibility criteria.

The employee will need to work a minimum of 20% of their usual hours and the employer will continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67%, of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.

The Job Support Scheme grant will not cover National Insurance contributions (NICs) or pension contributions. These contributions remain payable by the employer.

Employers must deduct and pay to HMRC income tax and employee NICs on the full amount that is paid to the employee, including any amounts subsequently met by a scheme grant.

Employers must also pay to HMRC any employer NICs due on the full amount that that is paid to the employee, including any amounts subsequently met by a scheme grant.

Employers must report these payments via a Full Payment Submission (FPS) to HMRC on or before the pay date in the normal way.

Employers and Employees must also still pay pension contributions in accordance with the applicable pension scheme terms, unless the employee has opted out or stopped saving into their pension. If applicable Student Loan deductions and the Apprenticeship Levy must also still be paid.

Employers have been legally required to close their premises as a direct result of coronavirus restrictions set by one or more of the four governments of the UK. For these businesses, the Job Support Scheme, through JSS Closed, will help them through the period that they are directly affected by these restrictions by supporting the wage costs of employees who have been instructed to cease work in eligible (closed) premises.

Each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish . This will help protect employee incomes, limit unemployment and retain employer-employee matches so that these premises are able to reopen as quickly as possible when circumstances allow.

Employees may also be entitled to additional financial support, including Universal Credit.

Employers will be able make their first claim from 8 December 2020 on GOV.UK. Employers will be able to claim from 8 December, covering salary for pay periods ending and paid in November. Subsequent months will follow a similar pattern, with the final claims for April being made from early May. More detail about this process will be published in guidance by the end of October 2020.

Agents who are authorised to do PAYE online for employers will be able to claim on their behalf.

HMRC will check claims and payments may be withheld if HMRC suspects a claim to be ineligible.

The amount of any overpayment by the employer must be paid back to HMRC where a claim contains incorrect information.

The full amount of any grant must be repaid if a claim is found to be fraudulent. Penalties of up to 100% of the amount overclaimed may be applied where appropriate. HMRC will consider publishing the details of employers who are charged a penalty because of a deliberately incorrect Job Support Scheme grant claim.

HMRC intend to publish the names of employers who have used the scheme. The public can report fraud to HMRC if they have evidence to suggest an employer is abusing the scheme.

Employees will be able to check if their employer has made a claim relating to them via their Personal Tax Account (sign up on GOV.UK).

Employers claiming the Job Support Scheme may still claim the Job Retention Bonus in respect of the same employee if they are eligible. Grants claimed under the Job Support Scheme can be used by employers to pay an employee’s wages and help meet the Lower Earnings Limit of the Job Retention Bonus.

There may be occasions where an employee’s pay period includes both eligible amounts to be claimed under the Coronavirus Job Retention Scheme for a period where they were furloughed until 31 October 2020 and an amount in respect of the Job Support Scheme from 1 November 2020. The amounts to be claimed from each of the schemes should be calculated separately following the guidance for each scheme which will take into account the number of days that fall within each of the scheme’s timelines. No amount of gross pay should be included in more than one scheme.

For example, if an employee is paid a weekly salary each Friday covering the previous 7 days, when they are paid on 6 November 2020 this will include their pay for the period Saturday 31 October 2020 through to Friday 6 November 2020. It will be necessary to follow the Coronavirus Job Retention Scheme guidance to calculate the claim for 1 day, being 31 October 2020 and then the remaining 6 days should be calculated following the Job Support Scheme guidance.

The calculated amounts should be claimed separately in accordance with the guidance for each scheme.

The employee must be working at least 20% of their usual hours.  For the time worked, employees must be paid their normal contracted wage.

For time not worked, the employee will be paid up to two-thirds of their usual wage.

Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.

Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information. Grants can only be used as reimbursement for wage costs actually incurred.

Employers must agree the new short-time working arrangements with their staff, make any changes to the employment contract by agreement, and notify the employee in writing. This agreement must be made available to HMRC on request.

Calculations

These calculations are for JSS Open and are indicative. Further details of calculations employers need to do to work out their claim will be available in the guidance published at the end of October 2020.

Reference salary

Under JSS Open, employers can claim for government support for their employees’ wages (including employees on National Minimum Wage) – up to a maximum of £1,541.75 per month, depending on how many hours they work. This section applies to JSS Open and the further guidance at the end of October will set out how to work out reference salary for JSS Closed.

Employers cannot claim for employees’ wages for any time they spend working.

Claims should commence from the later of the date that the employee starts working reduced hours or the date when working reduced hours is confirmed in writing, not when the decision is made. Claim periods can start from 1 November 2020 onwards. Claims are subject to a maximum reference salary of £3,125 per calendar month.

The amount an employer should use for calculating an employees’ reference salary is made up of the regular payments they are obliged to make, including:

• regular wages
• non-discretionary payments for hours worked, including overtime
• non-discretionary fees
• non-discretionary commission payments
• piece rate payments

Calculations cannot include:

• payments made at the discretion of the employer or a client, where the employer or client was under no contractual obligation to pay, including:
• any tips, including those distributed through troncs
• discretionary bonuses
• discretionary commission payments
• non-cash payments
• non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

Reference salary for employees with fixed pay

For employees who are paid a fixed salary, the Reference Salary is the greater of:

• the wages payable to the employee in the last pay period ending on or before 23 September 2020
• the wages payable to the employee in the last pay period ending on or before 19 March 2020, this may be the same salary calculated under the CJRS scheme

Reference salary for employees with variable pay

For employees whose pay is variable the Reference Salary is the greater of:

• the wages earned in the same calendar period in the tax year 2019 to 2020
• the average wages payable in the tax year 2019 to 2020
• the average wages payable from 1 February 2020 (or the employee’s start date if later) until 23 September 2020

Usual hours

There are different calculations for working out an employee’s usual hours – fixed or variable.

Employees who work fixed hours

For employees contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, usual hours are calculated based upon the greater of:

• the hours that the employee was contracted for at the end of the last full pay period ending on or before 23 September 2020
• the hours that the employee was contracted for at the end of the last full pay period ending on or before 19 March 2020, this may be the same number of hours calculated under the Coronavirus Job Retention scheme (NB. if employees moved to part time working, this may be varied full details will be included in forthcoming Guidance)

This should include hours paid as annual leave and statutory leave.

Calculation example 1: fixed hours and fixed salary employee

An employee has worked full time, from Monday to Friday, for A Ltd since 2011, and is paid £2,250 gross at the end of every calendar month. The employee has always been contracted to work 37.5 hours per week. A Coronavirus Job Retention Scheme grant was not claimed for the employee.

A Ltd is a small employer and meets all the eligibility criteria to qualify for Job Support Scheme.

The employee enters into a JSS Open temporary working agreement with A Ltd on 2 November 2020 to work Mondays and Tuesdays (7.5 hours each day, equating to 15 hours per week) from 2 November 2020 to 31 December 2020, at which point the position will be reviewed. The employee’s pay for the working hours in November is £945.

A Ltd calculates the amount of the JSS Open grant for the pay period 1 November 2020 to 30 November 2020 (one calendar month).

The employee’s usual hours are calculated for the days on which the employee is on a JSS Open temporary working agreement within the pay period (2 November 2020 to 30 November 2020). The employee’s usual hours are calculated by A Ltd to be 155 hours:

The steps to calculate the fixed employee’s usual hours are:

1. The greater of the number of hours contracted for at the end of the last pay period before 23 September 2020 (37.5) and the number of hours contracted for at the end of the last pay period before 19 March 2020 (37.5): 37.5
2. Divide by the number of calendar days in the repeating working pattern, including non-working days: 7 37.5÷7=5.36
3. Multiply by the number of days which the employee is eligible to be claimed for under JSS Open: 29 days x 5.36 = 155.44 rounded to 155 usual hours.

The employee did not take any time off in November, so the actual hours worked in November are 67.5 hours. A Ltd calculates that the employee didn’t work for 87.5 hours of their usual hours for November.

To calculate the percentage of hours worked: (67.5÷155) x 100 = 43.55%

A Ltd checks that the employee can be claimed for under Job Support Scheme. In November, the employee worked for 43.55% of their calculated 155 usual hours for November. Because the employee is working at least 20% of their calculated usual hours for November, providing other Job Support Scheme conditions are met, a claim can be made for the employee.

A Ltd calculates the employee’s Reference Salary as £2,250 for the pay period. The maximum Reference Salary that can be covered under the scheme is £3,125 per calendar month. The cap does not affect the calculation here because the Reference Salary is less than £3,125.

To work out the overall amount that A Ltd must pay the employee for their non-working hours in each pay period:

1. Start with £2,250 (the reference salary for the pay period)
2. Divide by 30 (the number of calendar days in the pay period)
3. Multiply by 29 (the number of days subject to a Temporary Working Agreement in the pay period)
4. Divide by 155 (the number of usual hours for the JSS Open days in the pay period
5. Multiply by 87.5 (the number of non-working hours for the JSS Open days)
6. Multiply by 66.67% = £818.59

This is made up of a 5% employer contribution, and a 61.67% government contribution which A Ltd can reclaim.

To work out the government contribution to the employee’s pay for the non-working hours: 1. Start with £818.59 (the total pay for the non-working hours) 2. Divide by 66.67 3. Multiply by 61.67 = £757.20

The employee’s total gross pay for November will be £1,763.59 (£945 + £818.59).

Please note that these calculations are indicative. Full details of sample calculations will be available in guidance published at the end of October 2020.

 Employees will be able to undertake training voluntarily in non-working hours. Where time spent on training attracts a minimum wage entitlement in excess of the grant payment, employers will need to pay the additional wages.

The Recruitment of New Apprenticeships incentive is available to all employers to support the recruitment of new apprentices

This incentive is available to all employers to support the recruitment of new apprentices. As an employer, you will be eligible for up to £3,000 for each new apprenticeship opportunity created from 1 April 2020 to 31 March 2021.

This bonus will apply to all new apprenticeship opportunities and includes apprentices who have been made redundant:

• Payment 1 – £2,000 after 90 days retention
• Payment 2 – £1,000 after 200 days retention from first employment

Who is eligible?

This scheme is open to employers who take on an apprentice participating in the Department for the Economy funded ApprenticeshipsNI or Higher Level Apprenticeship programmes.

As part of the application process, checks will be made to ensure that apprentices on similar pathways have not been displaced to support recruitment if this is found to be the case eligibility may be impacted.

To note – programme eligibility excludes public sector employees.

How do I apply?

Details on the application process will be provided in due course.

for 40 employees in April, 50 in May and 45 in June, the total amount of employees that can be claims each month going forward after 1 July would be 50. This places an overall limit on the numbers of employees an employer can claim for so employers might need to review their workforces and perhaps this means some workers will have to return to work and come off of furlough before others can join. This would not apply where employees are added following a return from maternity and other family leave, returning military reservists and some TUPE transfers after 10 June 2020.  Something to watch out for.

Employee consent:  Furlough under the Revised Scheme, whether full furlough or part-time furlough, must be agreed, and sets out the requirements of such an agreement. This can be by agreement between the employer and employee, or by collective agreement between the employer and a trade union.

Manufacturing NI – Flexi-furlough FAQs

The Apprenticeship Return, Retain & Result Scheme (RRR) will provide incentive payments to employers to support the return, retention and result for apprentices

Businesses that have had to furlough an apprentice under the terms of the Coronavirus Job Retention Scheme will be able to access incentive payments through the Apprenticeship Return, Retain and Result Scheme (RRR).

The scheme will help you return your apprentice(s) from furlough, and retain them until 31 March 2021 and on to successful completion of their apprenticeship.

The total amount payable under the scheme will be a maximum of £3,700 per apprentice, distribution as follows:

• Return – £500 per returned furloughed apprentice payable for the first full month of paid apprenticeship from 1 November 2020.
• Retain – maximum of £2,000 available: £500 per month for up to 4 months of paid apprenticeship between 1 December 2020 and 31 March 2021.
• Result – £1,200 for successful full framework achievement of a returned furloughed apprentice.

Who is Eligible?

This scheme is open to employers participating in the Department for the Economy funded ApprenticeshipsNI or Higher Level Apprenticeship programmes, who return their furloughed apprentices to work since April 2020, with payments as follows:

Return Incentive – £500 per returned apprentice

• Payable for the first complete month of paid employment for the returned apprentice, beginning from 1 November 2020 (after the Coronavirus Job Retention Scheme ends) for a period of at least 4 weeks.
• For earlier returners, continued employment for the month of November 2020, will constitute the qualifying period for the “Return” incentive. This incentive will be paid on submitted claims with appropriate evidence of furlough and employment from December 2020.

Retain Incentive – In April 2021 you will be able to apply for up to £2,000 for each apprentice you have retained

• £500 will be available for each full month for a period of up to 4 months, from 1 December 2020 to the end of March 2021.
• The period of retain will also adjust to reflect any in-month apprentice returners. For example, if an apprentice returned on the 12 November, the return month would be captured as 12 November to 11 December.

Result Incentive – £1,200 for successful full framework achievement of a returned furloughed apprentice

• This incentive is payable alongside any of the other employer incentives and will be payable on submission of proof of full framework achievement of the AppsNI or Higher Level Apprenticeship (HLA).
• The timing of this payment will depend upon when the apprenticeship is successfully completed and will be payable for all successful completions beginning from 1 November 2020.

To note: Once an apprenticeship is complete, no further retain incentive beyond the completion date can be claimed.

What evidence will I need?

It is important that you retain evidence of when:

• your apprentice was furloughed
• your apprentice returned and was retained, in paid employment during the period claimed, this can be up to the total period of 5 months (1 month return and up to 4 months retained) and,
• your apprentice has continued and completed their paid apprenticeship

Further details of evidence requirements will be detailed in the application pack.

How to apply?

Details on the application process will be issued in due course.

1. Approaching deadline for 30 -day redundancy consultation while Scheme in place 
   If it is looking as though you may need to make between 20 to 99 redundancies (triggering a minimum 30-day statutory collective consultation period), it is worth noting that the deadline within which to do so while the Scheme is live will arise around end – September.
2. Job Retention Bonus
   Under the job retention bonus, employers will receive a £1,000 one-off payment for each employee they bring back from furlough and continuously employ through to January 2021.For businesses to be eligible for the bonus, the employee will need to be paid at least £520 on average in each month from November 2020 to the end of January 2021 (equivalent to the national insurance lower earnings limit).  Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

Maximum number of Claimants:  One point to note, employers will only be able to claim for the maximum employees it had on the JRS as at 1 July. For example, if an employer has claims for 40 employees in April, 50 in May and 45 in June, the total amount of employees that can be claims each month going forward after 1 July would be 50. This places an overall limit on the numbers of employees an employer can claim for so employers might need to review their workforces and perhaps this means some workers will have to return to work and come off of furlough before others can join. This would not apply where employees are added following a return from maternity and other family leave, returning military reservists and some TUPE transfers after 10 June 2020.  Something to watch out for.

Employee consent:  Furlough under the Revised Scheme, whether full furlough or part-time furlough, must be agreed, and sets out the requirements of such an agreement. This can be by agreement between the employer and employee, or by collective agreement between the employer and a trade union.

Manufacturing NI – Flexi-furlough FAQs

1.  Support levels tapered down from 1 September 
   Since 1 September, the level of support provided by the Government under the Scheme has reduced, meaning employers now need to cover the cost of an extra 10% of furloughed employees’ pay (as well as the cost of pension contributions and national insurance contributions that employers have had to pay since August). Remember that furloughed employees are still entitled to 80% pay overall, subject to the cap.From 1 October, the Government contribution will be further tapered down, so employers will need to cover 20% of furloughed employees’ pay plus the cost of pension contributions and national insurance contributions (subject to the cap).  The Scheme is currently expected to close on 31 October 2020.
2. HMRC writing to employers who may have over-claimed under the Scheme
   On 28 July, the Government published guidance  on HMRC’s powers to impose penalties on employers who have claimed sums under the Scheme to which they are not entitled and have failed to repay these or notify HMRC of the over-claim.  Since then, it has been reported that HMRC has begun writing to employers that it believes may have claimed too much money through the Scheme based on the information it holds about them.
3. Approaching deadline for 30 -day redundancy consultation while Scheme in place 
   If it is looking as though you may need to make between 20 to 99 redundancies (triggering a minimum 30-day statutory collective consultation period), it is worth noting that the deadline within which to do so while the Scheme is live will arise around end – September.
4. Job Retention Bonus
   Under the job retention bonus, employers will receive a £1,000 one-off payment for each employee they bring back from furlough and continuously employ through to January 2021.For businesses to be eligible for the bonus, the employee will need to be paid at least £520 on average in each month from November 2020 to the end of January 2021 (equivalent to the national insurance lower earnings limit).  Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

Maximum number of Claimants:  One point to note, employers will only be able to claim for the maximum employees it had on the JRS as at 1 July. For example, if an employer has claims for 40 employees in April, 50 in May and 45 in June, the total amount of employees that can be claims each month going forward after 1 July would be 50. This places an overall limit on the numbers of employees an employer can claim for so employers might need to review their workforces and perhaps this means some workers will have to return to work and come off of furlough before others can join. This would not apply where employees are added following a return from maternity and other family leave, returning military reservists and some TUPE transfers after 10 June 2020.  Something to watch out for.

Employee consent:  Furlough under the Revised Scheme, whether full furlough or part-time furlough, must be agreed, and sets out the requirements of such an agreement. This can be by agreement between the employer and employee, or by collective agreement between the employer and a trade union.

Manufacturing NI – Flexi-furlough FAQs

The Government has published a further amended Treasury Direction, setting out the technical details of the Coronavirus Job Retention Scheme which is due to take effect from 1^st July and how it will change. This is the legal basis for Furlough/Flexible Furlough Scheme and takes precedence over previous guidelines.

Here are the top 5 key aspects for employers.

Purpose of scheme: Integral to the purpose of CJRS is that the amounts paid to an employer pursuant to a CJRS claim are used by the employer to continue the employment of employees in respect of whom the CJRS claim is made whose employment activities have been adversely affected by the coronavirus and coronavirus disease or the measures taken to prevent or limit its further transmission. 

Payment periods:  Claims under the original Scheme cannot relate to periods after 30 June. This is the case even if an employee commenced a three week period of furlough under the original Scheme which only ends after 30 June. In such a case, the employer would need to claim under the original Scheme for the period up to and including 30 June and under the Revised Scheme for the period thereafter. All claims under the original Scheme must be submitted by 31 July at the latest.

Eligibility:  Employers can only claim for employees who have previously been furloughed for at least three consecutive weeks beginning on or before 10 June, but there are exceptions for employees who are returning from statutory family leave, who TUPE transferred to a new employer after 10 June, or who are armed forces reservists returning from a period of active duty.

Maximum number of Claimants:  One point to note, employers will only be able to claim for the maximum employees it had on the JRS as at 1 July. For example, if an employer has claims for 40 employees in April, 50 in May and 45 in June, the total amount of employees that can be claims each month going forward after 1 July would be 50. This places an overall limit on the numbers of employees an employer can claim for so employers might need to review their workforces and perhaps this means some workers will have to return to work and come off of furlough before others can join. This would not apply where employees are added following a return from maternity and other family leave, returning military reservists and some TUPE transfers after 10 June 2020.  Something to watch out for.

Employee consent:  Furlough under the Revised Scheme, whether full furlough or part-time furlough, must be agreed, and sets out the requirements of such an agreement. This can be by agreement between the employer and employee, or by collective agreement between the employer and a trade union. 

Manufacturing NI – Flexi-furlough FAQs

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/895778/Further_Treasury_Direction_made_on_25_June_2020_under_Sections_71_and_76_of_the_Coronavirus_Act_2020.pdf

https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme#record-keeping-requirements

Parents on statutory maternity and paternity leave who return to work in the coming months will be eligible for furlough scheme even after 10 June cut-off date.  Coronavirus Job Retention Scheme will close to new entrants at the end of June as new flexibilities are introduced to support economy.  

The Coronavirus Job Retention Scheme (CJRS) has been extended until October, with new flexibilities introduced from 1 July to support the economy by allowing furloughed employees to return to work part-time.

To enable the introduction of part-time furloughing, and support those already furloughed back to work, claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees. This means people must be on the furlough scheme by 10 June.

However, the government confirmed that parents on statutory maternity and paternity leave who return to work in the coming months after a long period of absence will be permitted to be furloughed.

This will only apply where they work for an employer who has previously furloughed employees.

Chancellor of the Exchequer Rt Hon Rishi Sunak MP said:
When I announced these changes to the furlough scheme last month, I was clear that we wanted to do this in a fair way, that supports people back to work as the country begins to re-open following coronavirus.
But for parents returning from leave, their circumstances has meant that they are still in need of support, and I’m pleased that they will be able to receive the financial assistance they and their family will need.
The CJRS, which has so far helped 1 million employers across the UK furlough almost 9 million jobs, will close to new entrants on 30 June, with the last three-week furloughs before that point commencing on 10 June.
More details of the change will be included in updated guidance, published on 12 June.

https://www.gov.uk/government/news/parents-returning-to-work-after-extended-leave-eligible-for-furlough

Chancellor Rishi Sunak outlined major changes to the furlough scheme on 29th May 2020 

March – July 2020:   Government will pay 80% of wages, up to a cap of £2,500 per employee, plus the associated Employer National Insurance contributions (ER NICS) and pension contributions. Employers not required to pay anything.

August 2020:   Government will pay 80% of wages, up to a cap of £2,500 per employee. Employers will pay ER NICS and pension contributions. For the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

September 2020:   Government will pay 70% of wages up to a cap of £2,187.50, per employee. Employers will pay ER NICS and pension contributions, plus 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.

October 2020:   Government will pay 60% of wages up to a cap of £1,875, per employee. Employers will pay ER NICS and pension contributions, plus 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

The old scheme will close to new entrants on June 30th.

Employers wanting to place new employees on the scheme will need to do so by June 10th, to allow time to complete the minimum furlough period before then.

Closure to new entrants from July:

• The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June.

• This means that the final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June. Employers will have until 31st July to make any claims in respect of the period to 30 June.

• From 1 July the scheme will only be available to employers that have previously used the scheme in respect of employees they have previously furloughed.

• From 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. This is necessary to reflect the forthcoming changes to the scheme.

• The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS.

• Employers can continue to make claims in anticipation of an imminent payroll run, at the point payroll is run or after payroll has been run.

• Employers will be able to make their first claim under the new scheme from 1 July.

 What you need to know about Flexi-Furlough

• From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked.
furloughed employees.
• From 1 July, employers will be able to agree any working arrangements with previously
• When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week.
• This is a minimum period and those making claims for longer periods such as those on monthly or two weekly cycles will be able to do so.
• To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
• Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. Further details will be included in future guidance.
• Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
• For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
• Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.

From August 2020, the level of the grant will be slowly tapered to reflect that people will be returning to work:

• In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work.

• In August, the government will pay 80% of wages up to a cap of £2,500 and employers will pay ER NICs and pension contributions for the hours the employee does not work.

• In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.

• In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500

The cap will be proportional to the hours not worked. 

As with the previous scheme, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.

• An early assessment of CJRS claims suggest that around 40% of employers have not made a claim for employer NICs costs or employer pension contributions and so will be unaffected by the change in August if their employment patterns do not change.3

• Indicative analysis of claims from large businesses suggests that around 25% of CJRS monthly claims are below the threshold where employer NICs and automatic enrolment pension contributions are due, and so no employer contribution would be expected for these payments to furloughed employees in August.4

• Early analysis of CJRS claims suggests the equivalent wage on the average CJRS claim is around £1,380 per month. Requiring firms to pay the Employer NICs costs and pension contributions on the CJRS payments will introduce a cost of £69 per month on this figure5. This equates to 5% of total gross employments costs6 the employer would have incurred had the employee not been furloughed. This percentage will vary according to the wages of the employee who has been furloughed.

• The employer cost per month on the average grant will rise to £207 in September and to £345 in October representing 14% and 23% of gross employment cost, respectively.

https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme

This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.

The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and following an announcement on 12th May, the scheme in its current format has been extended to the end of July 2020. 

From Aug -end of October 2020, a revised scheme will be put in place whereby furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.  Changes to allow more flexibility will come in from the start of August. More specific details and information around implementation will be made available by the end of this month. 

All UK-wide employers with a PAYE scheme will be eligible – this includes the public sector, Local Authorities and charities.

Under the recent changes, employees can now be designated on the scheme if they were on PAYE payroll on or before 19th March 2020.  This is in comparison to the previous qualifying date of 28th February 2020.  

The guide for employees states:  “If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19).”

The information around this is still not clear and we would urge you to proceed with caution when considering to furlough staff.  The guidance states that the scheme is designed to support employers whose operations have been severely affected by coronavirus (COVID-19)”. There is no clarification, however, as to what is meant by severe affected.

The COVID-19: support for businesses guidance states that it will cover those who “would otherwise have been laid off during this crisis” and the COVID-19: guidance for employees states that it can be accessed if the employer cannot cover staff costs due to COVID-19, in order to avoid redundancies.  The UK scheme does not require that employers must be able to show that they would be unable to pay wages (unlike the ROI scheme which does).

Pending issue of further detail around the scheme, and taking into account that HMRC does retain the right to retrospectively audit, companies should be prepared to justify to HMRC why they furloughed employees, but that it would appear unlikely that they would need to have been planning redundancies.

In any case, we have taken advice that companies should not enter into furlough lightly.

You will need to:

• Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
•  You will need to submit information to HMRC through the online portal about the employees that have been furloughed and their earnings 

The online service has been active from 20 April 2020. You can make a claim now via:   https://www.access.service.gov.uk/login/signin/creds

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

 Furloughed employees must have been on your PAYE payroll on or before 19th March 2020, and can be on any type of contract, including:

• full-time employees
• part-time employees
• employees on agency contracts
• employees on flexible or zero-hour contracts
• Employees with caring responsibilities as a result of Covid-19

Any employer with a UK payroll and a UK bank account will be able to claim, but employees must have been on your PAYE payroll before or on 19 March 2020 and notified to HMRC on an RTI submission on or before 19 March 2020. This means you must have made an RTI submission notifying payment in respect of your employee to HMRC on or before 19 March 2020. If an employee was employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and was made redundant or stopped working for you prior to 19 March 2020, they are also able to qualify for the scheme if you re-employ the individual(s) and put them on furlough.

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme and you will have to continue paying the employee through your payroll and pay their salary subject to the terms of the employment contract you agreed.

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

Employees hired after 19th March 2020 cannot be furloughed or claimed for in accordance with this scheme.

You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.

If your employee is on unpaid leave:  Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 19th March.

If your employee is on Statutory Sick Pay:  Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this.

If your employee has more than one job:If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Employees who are shielding in line with public health guidance can be placed on furlough.

The basic rule is that employees and other individuals paid subject to PAYE, such as officeholders and agency workers, can be furloughed provided they were on the payroll and included in an RTI submission made on or before 19 March 2020 (the qualifying date was previously 28 February 2020).

However, individuals who were made redundant after 28 February can be rehired and then furloughed to preserve their job, even if they were not re-employed until after 19 March. Claims can be made in relation to these workers from the date on which they were furloughed.

The Scheme in its current format is currently available up to the end of July 2020 (as per Governments announcement on 12.5.20).

From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

The scheme will continue in its current form until the end of July. Changes to allow more flexibility will come in from the start of August. More specific details and information around implementation will be made available by the end of this month.

The minimum furlough period is 3 weeks.  Claims can be backdated until the 1 March 2020 if applicable but is only payable from the day the staff member was put on furlough.

• 80% of your employees’ wages (even for employee’s on National Minimum Wage) – up to a maximum of £2,500 per month. Do not claim for the worker’s previous salary.
• Employer National Insurance contributions that are paid on the subsidised furlough pay.

Employer pension contributions that are paid on the subsidised furlough pay, up to the level of the minimum automatic enrolment employer contribution. The maximum level of grant for employer pension contributions on subsidised furlough pay is set in line with the minimum automatic enrolment employer contribution of 3% on qualifying earnings. Grants for pension contributions can be claimed up to this cap provided the employer will pay the whole amount claimed to a pension scheme for the employee as an employer contribution.

You can choose to top up your employee’s salary, but you do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up salary.

Grants will be prorated if your employee is only furloughed for part of a pay period.

 The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:

-regular wages you pay to employees
-non-discretionary overtime
-non-discretionary fees
-non-discretionary commission payments
-piece rate payments

You cannot include the following when calculating wages:

-payments made at the discretion of the employer or a client – where the employer or client was under no contractual obligation to pay, including: tips /discretionary bonuses / discretionary commission payments

-Non cash payments

– Non monetary benefits such as company cars and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

 The entirety of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.
Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.
Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

Firstly, employers must discuss with their staff and make any changes to the employment contract by agreement.  

On 16th April, The Treasury published the Treasury Direction that will govern the treatment of claims for grant under the Coronavirus Job Retention Scheme. The Direction does deviate from the already published Guidance in a number of respects. The key difference is that whereas the guidance simply required the Employer to have notified the employee in writing that they were on furlough leave, the Direction (Reg 6.7) states that the requirement is that “the employer and the employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment.”

A record of this communication must be kept for 5 years.

In our view, it is important that employees agree to furlough leave as it involves a change in terms and conditions – and indeed, while previous versions of the Government guidance had seemed to suggest that employers could simply confirm to employees that they were being furloughed, the Treasury Direction made clear that written agreement would be required, although it states that agreement via email is permissible. Following concern that this would put many employers who had simply imposed furlough by confirming it in writing outside the scope of the Scheme, the Government guidance updated on 17 April seems to be an attempt to tone down the Treasury Direction’s requirement for written agreement. It provides that employers must confirm in writing to their employee that they have been furloughed “in a way that is consistent with employment law”. It goes on to state that there “needs to be a written record, but the employee does not have to provide a written response.” However, unless an employer has a contractual right to lay-off, or is maintaining full pay, confirming furlough in a way that is consistent with employment law would – strictly speaking – require the employer to obtain the employee’s agreement (whether or not in writing) in any event. Moreover, the step-by-step guide for employers on how to claim specifies that in order to be eligible to claim under the Scheme “an employer must agree with the employee that they are a ‘furloughed worker’”.

In practice, given the unprecedented circumstances of the Covid-19 crisis, it is likely that most employees will agree to furlough, particularly if the alternative is redundancy. Good communication is key in order to encourage agreement. While in-person meetings with all affected staff are unlikely to be possible for most employers in the current circumstances, we would recommend that employers try to arrange some form of meeting (e.g. via Zoom, Skype, or even telephone) at which they can explain to affected employees what they are proposing and the reasons why furlough is necessary, before sending them letters to seek their agreement.

In terms of the mechanics of seeking agreement, where practical, it is best for an employer to write to the employee setting out the proposed move to furlough leave and ask the employee to sign and return a copy of the letter. E-signatures would be appropriate if the company has the necessary software. If e-signatures are not possible, the employer could ask employees to sign and return a hard copy letter. However, if the letter is sent to employees by email, they may not have access to printing and scanning facilities that would enable them to provide this. Accordingly, employers could as an alternative provide for employees to confirm their agreement by email or text message to an appropriate contact at the company (e.g. HR or line manager) using a set form of words, such as “I confirm my agreement to the variation of my terms and conditions of employment to place me on furlough leave as described in the letter from the company dated [DATE]”, or replying to the employer’s email using voting buttons.

Employers that recognise a trade union for collective bargaining with a defined bargaining unit and have a standard incorporation clause in individual contracts of employment should seek to engage with the trade union. In our view, if your collective bargaining arrangements cover changes to pay and hours, then they should also cover furloughing. The fact that the Treasury Direction refers to agreement between “employer and employee” has caused concern for employers that had relied on a collective agreement to furlough employees, as it suggested that an individual agreement would be required in order for employers to make a claim under the Scheme. However, the 23 April update to the Government guidance for employers helpfully confirms that “Collective agreement reached between an employer and a trade union is also acceptable for the purpose of such a claim”. The Government guidance for employees reflects this but also notes that “Once agreed your employer must confirm in writing that you have been furloughed to be eligible to claim” and advises employees to contact their employer if they do not receive such confirmation. Accordingly, if the union agrees, we would suggest that you also communicate/send letters to employees individually, to confirm the change to terms that has been agreed by the union and that it is incorporated into their contracts temporarily. In view of the wording in the Treasury Direction, some employers might choose to ask employees to confirm their agreement, but the 23 April update to the Government guidance (which post-dates the Treasury Direction) does suggest that HMRC will not require this.

If an employer with a unionised workforce wants to speed up the process of getting employees’ agreement to furlough, we would suggest that the employer impress upon the union the exceptional and time-critical circumstances. The employer could offer the union a shortened process, for example, one meeting at which the proposal would be discussed and agreement sought. You could also suggest that if the union does not agree then the employer will consider going directly to the employees for their individual agreement. While there is a degree of risk that making direct offers to the employees might contravene section 145B of the Trade Union and Labour Relations (Consolidation) Act, we think this risk is limited given the temporary nature of the proposed contractual changes.

Where a large number of employees is involved and you are not relying on a collective agreement, seeking individual agreement may be time-consuming and administratively burdensome. Pressure of time may mean that employers seeking to place employees on furlough leave need to truncate the normal process they would follow when seeking employees’ agreement to a significant contractual change. 

Employers that have already placed employees on furlough without agreement, or who had requested employees’ agreement but did not receive it (e.g. if employees did not reply to a furlough letter as requested), may wish, where practical, to seek individual confirmation from furloughed employees now, given that there is nothing in the Treasury Direction that expressly requires the agreement to pre-date the period of furlough. That said, it has been suggested that a retrospective agreement may not be effective, given the future tense wording of the Treasury Direction, which requires the employer and employee to have agreed that the employee “will cease all work”. In addition, even if employers do write to employees seeking their retrospective agreement to furlough, there is no guarantee that they will respond – positively or at all. Finally, as noted above, while the inconsistency between the two documents is unsatisfactory and generates uncertainty, the fact that the Government guidance was updated after the publication of the Treasury Direction does suggest that HMRC may not be intending strictly to enforce the Treasury Direction requirement. In view of this, employers will have to make a judgment call as to whether they try to obtain retrospective individual agreement or seek to rely on whatever original communication they used to confirm employees’ furlough leave and wait and see whether HMRC takes issue with that.

(While the Government guidance indicates that if sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes, in our view, it should not be necessary for an employer to initiate collective consultation when first proposing to put employees on furlough leave, unless the employer anticipates that 20 or more employees are likely to refuse – and the consequence for those employees who refuse would be that they are dismissed. Furlough is likely to be an attractive option for most employees, so employers would be unlikely to anticipate 20+ refusals at the outset).

(Also note that if furloughing a company director, the company board must formally adopt the decision, note it in the company records and communicate the decision to the company director concerned.)

At present the scheme is a non-statutory one, being based on guidance issued by the UK Government. It does not change existing contractual or statutory employment law nor the employment provisions of the discrimination laws which, therefore, continue to apply as usual.

Although most of the legal consequences of participating in the scheme will lie in the realm of contractual or statutory employment law, there may also be some discrimination law implications for employers. These largely lie in relation to the question of who should be offered furlough leave, a point that is covered in the Government’s guidance.

These issues are more likely to arise where you are going to keep some of your business operations running, perhaps with a “skeleton crew”, and where you might be considering whether to offer furlough leave only to some employees and not to others, whom you might instead expect to continue working.

When considering this, it would be prudent to give some thought to how to make these decisions in a fair manner to reduce the possibility of facing a discrimination complaint later.

 For more information- click here: Equality Commission – FurloughAdviceNote

 We strongly recommend that employers seek consent for furloughing if there is no contractual term permitting it (in line with employment law principles), eventhough this is not necessarily in terms of accordance with the Treasury Direction on this and remains a complex matter as employee consent still needs to have been obtained  .     

If furloughing will mean selecting some people in the same role to come to work and some to stay at home, employers should devise fair criteria to select who falls into each group. Where too many people volunteer for furlough, we believe it would be lawful to give preference to those who are vulnerable.

Employers must ensure that they obtain written consent from employees who will be furloughed, and retain a copy of the notice for at least 5 years.

The following resource, from the Labour Relation Agency outlines more, and also includes a template letter

Furloughed Workers LettCovid-19 Practical Guidance – The Coronavirus Job Retention Scheme (CJRS) Updated Version 01.04.20

The Covid-19 crisis means that many employers do not have enough work for all of their employees, but there is still some essential work to be done in certain functions or departments. The Government guidance helpfully notes that employers do not have to put all of their employees on furlough. However, it also makes clear that when employers are making decisions in relation to whom to offer furlough to, equality and discrimination laws will apply in the usual way.

As a first step, employers need to think carefully about what roles they still require employees to perform and the numbers they need in each role. For example, an employer seeking to reduce its shop-floor workforce by 30% will still require a certain number of supervisors to work, in addition to the production operatives.

Having identified the numbers it needs to place on furlough in particular roles, our view is that an employer can probably ask employees to volunteer for this. Doing so may help to reduce any sense of unfairness, as some employees may prefer to continue to work and receive full pay, while others (in particular those who fall into a vulnerable category, or who have childcare needs) may prefer to cease work and remain at home on reduced pay. Assuming that the employer is not proposing to top up employees’ pay above the amount that it can recover from the Government under the Scheme, whether employees would prefer to be furloughed or to continue to work may also be influenced by how much they are normally paid. The Scheme covers up to 80% of employees’ gross pay, capped at £2,500 per month (plus the employers National Insurance and minimum auto-enrolment pension contributions on that subsidised furlough pay – see question 13 below). If £2,500 represents 80% of an employee’s gross monthly pay, their full gross monthly pay would be £3,125 per month, or £37,500 per year. Employees whose normal pay is higher than this will suffer more than a 20% pay cut and therefore might be less keen to be furloughed than those for whom the pay cut is limited to 20%. That said, many employees on lower pay may be unable to afford even a 20% pay cut. Accordingly, while we think that most employees would agree to furlough if the alternative is redundancy, they may be less likely to actively volunteer for it if they have the option of continuing at work on normal pay.

Where an employer receives more volunteers than it needs to furlough, or does not receive enough volunteers, it will need to conduct some sort of selection process. The recommended approach may differ depending on whether there are too many or too few volunteers. If an employer has too many employees volunteering to be furloughed, it will need to decide which volunteers to turn down based on which employees have the necessary skills to perform essential retained roles. If an employer has too few employees volunteering to be furloughed, it will have to look at each of the roles for which it has too many employees still wishing to work and apply appropriate selection criteria. As an alternative in either case, the employer may wish to consider rotating groups of employees on and off furlough.

The safest approach when deciding whom to furlough if you don’t have the right number of volunteers may be to conduct an objective selection exercise in relation to the roles required in order to ensure you retain the best employees but, in reality, practical considerations as to which employees are still able to work, as well as employee relations issues, will probably take precedence. It is also likely that if an employer is in serious financial difficulty and has a really pressing need to furlough employees as soon as possible in order to be able to continue trading, a more limited or cursory approach to the decision may be acceptable.

While employers must take care not to discriminate when selecting which employees to furlough, it is worth noting that certain otherwise discriminatory selection decisions might potentially be justifiable in the circumstances of the Covid-19 crisis. For example, selecting employees aged over 70 could amount to age discrimination. However, it may be possible to justify this as a proportionate means of achieving a legitimate aim – namely, protecting the health and safety of vulnerable employees as identified by the applicable Government guidance.

Employers will also need to keep the situation under review, as they may find that work volumes increase or reduce unexpectedly and they need to bring people back from furlough, or place more employees on furlough, as things evolve.

Certain employees may be within the groups identified by the Government as being particularly vulnerable to increased risk of contracting severe illness at this time and who be should particularly stringent in following social distancing measures.

The list includes people aged 70 or over, many people with health conditions, some of whom would be deemed to be disabled, and pregnant women. If you have any employees who meet those criteria, then offering them priority over others in taking furlough leave may seem to be a sensible course to take, but it may also raise questions of age, disability and pregnancy discrimination. So, what are the risks?

Firstly, any employee who is not a member of those vulnerable groups and who is aggrieved at not being offered the same priority is very unlikely to succeed if they complain of disability or pregnancy (or sex) discrimination.

Secondly, younger employees aged below 70 who are not otherwise within the list of vulnerable people would potentially be able to complain of age discrimination. However, it is likely that any such complaint would not succeed because any prioritisation given to the over 70s is likely to be justified by the nature of the heightened risk that they are under and by its being a measure that is wholly in line with the Government’s public health policies at this time.

Finally, if you have a procedure for rotating employees on-and-off furlough leave and if the work can be done from an employee’s home, it would be prudent to offer the opportunity to rotate to all employees, including to those who are members of the vulnerable groups.

If the employee has been employed for 12 months or more, you can claim the highest of either the:

• same month’s earning from the previous year
• average monthly earnings for the 2019-2020 tax year

If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.

If the employee only started in February 2020, work out a pro-rata for their earnings so far, and claim for 80%.

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.

For full and part time ‘fixed rate employees’ (as defined by the Treasury rules), the grant will be based on their actual salary, before tax, for the latest pay period that ended on or before 19 March. However, employers who furloughed workers on the basis of HMRC’s earlier guidance can use actual pay for the latest period ended on or before 28 February as the reference salary for their first claim.

For other employees (i.e. those with variable pay), their reference pay is the higher of the:
Average monthly pay for the 2019/20 tax year; and Pay from the same month in the prior year.

Broadly, the reference pay includes non-discretionary cash payments such as wages, overtime, fees and compulsory commission. Discretionary payments – such as bonuses and tips – and the cost of benefits in kind are excluded.
For these purposes, the Treasury rules definition of ‘fixed rate employee’ is similar to the definition of ‘salaried worker’ for National Minimum Wage (NMW) purposes.

This was not covered in HMRC’s earlier guidance. In practice, many furloughed workers considered by their employer to be on ‘fixed pay’ based on HMRC’s earlier JRS guidance will not be treated as ‘fixed rate employees’ under the final Treasury rules. HMRC’s latest guidance suggests that, provided the employer’s approach is reasonable, they will not refuse or recover claims based on how employees have been categorised. However, this is a difficult area. Employers should ensure the approach they take could be sustained if challenged, and is consistent with how the relevant workers are treated for NMW purposes.

HMRC released an online calculator on 20 April to assist employers in compiling their JRS claims. The calculator is currently unable to support calculations for a number of categories of employee, the most notable being those employees with variable pay. It is expected subsequent versions of the calculator will address this issue, however, until that time, employers will have to calculate their own claims, without aid of HMRC’s calculator, for all but fixed rate employees.

Holiday pay:  HMRC’s latest guidance also confirms that workers continue to accrue, and may take, holiday leave whilst furloughed. Holiday whilst furloughed must be paid at the employee’s full rate, but the employer’s claim remains subject to the usual JRS limit. HMRC will keep this policy under review.

-Employees will continue to accrue annual leave during Furlough as per their employment contract.  

-In general it is possible for employers to require an employee to take holiday at a certain time as long as they give the notice required under the working time regulations.  However an employer should not require employees to take holidays during furlough.

– By agreement with the employee, it is permitted to vary holiday pay entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.  Employees can take holiday whilst on furlough. Working Time Regulations (WTR) require holiday pay to be paid at the normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay the employee received in the previous 52 working weeks. Therefore, if an employee take holiday while on furlough, the employer should pay them their usual holiday pay in accordance with the WTR. Employers will be obliged to pay the additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period. 

-Note: regulations have been introduced in the UK allowing up to 4 weeks unused leave to be carried into the next 2 years, easing the potential impact of a workforce with a significant amount of annual leave to take after the crisis.

The guidance below outlines how holiday entitlement and pay operate during the coronavirus pandemic. It is designed to help employers understand their legal obligations, in terms of workers who:
• continue to work
• have been placed on furlough as part of the government’s Coronavirus Job Retention Scheme (CJRS)

https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If you usually take the bank holiday as leave then your employer would either have to top up your pay to your usual holiday pay, or give you a day of holiday in lieu.

We will keep a watch out for any further updates on this.  

The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary.

All the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.
Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

The normal rules on statutory leave and pay will still apply.

Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.

If your employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.

Employees who qualify for SMP, will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.

If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.

The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.

Parents on statutory maternity and paternity leave who return to work in the coming months will be eligible for furlough scheme even after 10 June cut-off date

• assess workplace risks;
• alter the employee’s working conditions or hours of work to avoid any significant risk;
• where such alteration is not reasonable, or would not remove the risk, offer suitable alternative work on terms that are not substantially less favourable; and 
• where suitable alternative work is not available, or the employee reasonably refuses it, to medically suspend the employee on full pay. 

For those who can do so, the simplest course would be to agree with the pregnant employee that she should work from home for the time being – this alteration of working conditions would remove any risks associated with Covid-19 in the workplace and would be in accordance with the enhanced ‘stay at home’ guidance.

What if an employer’s risk assessment concludes that work is, in fact, safe for a pregnant employee, but she refuses to attend work because of concerns about Covid-19 in the workplace? In these circumstances, the employer should bear in mind that there is a potential risk if they subject the employee to a detriment as a result. The employer may wish to place such an employee on furlough leave if she is eligible but there may be a need to top up her furlough pay to full pay. We suggest that you seek advice if you encounter this situation.

It appears from the guidance that people who are sick or self-isolating may only be furloughed once they would be ready to return to work. It was clarified that the scheme is not intended for short term sickness absences, but it is possible to furlough employees on long term sick.

It appears that employees who are on unpaid leave due to childcare requirements may be furloughed, provided that the employer has no work for them to do.

Those on unpaid leave are not eligible unless they were placed on unpaid leave after 28th February 2020.  Employees who were on unpaid leave on 28 February can only be furloughed from the date on which it was agreed they would return to work, but employees placed on unpaid leave after that date can, with their agreement, be recalled and furloughed at any time.

The guidance makes clear that furlough is not intended to cover short-term absence, or those on a 7 or 14 day period of self-isolation.  However employees currently off sick for longer periods can be furloughed.  This includes long-term sick employees and those who are shielding.  These employees must be brought off sick pay (including SSP) to be placed on furlough.

They may still be entitled to SSP.  But to access that, the employee would have to be taken off furlough and placed on SSP.  You should check that you don’t however break the minimum 3 week furlough period before doing so.  

Employees ‘shielding’ (or who need to stay at home with someone who is shielding) in line with public health guidance can be placed on furlough.  If your company does not operate a furlough scheme, then these employees can claim through statutory sick pay in line with company’s sick policy.

A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

The guidance has also been updated to confirm that restriction also applies to prevent them working for any linked or associated organisation.

This is fine if the employee is permitted to hold another job under their contract.  Contracts will usually govern employees holding a second job and will remain in force during furlough.  

Many employers have considered this as a fair means of introducing furlough. It appears that this is permissible provided that each individual is furloughed for at least three weeks on each occasion.

 The online claim service can be accessed through: https://www.access.service.gov.uk/login/signin/creds

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities. To prepare to make your claim you will need:

• a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’
• be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’
• the following information for each furloughed employee you will be claiming for: Name, National Insurance number, Claim period and claim amount, PAYE/employee number (optional).
• if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee. If you have 100 or more furloughed staff – you will need to upload a file with information for each employee; HMRC will accept the following file types: .xls .xlsx .csv .ods.

You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.

You cannot claim for:

• additional National Insurance or pension contributions you make because you chose to top up your employee’s salary
• any pension contributions you make that are above the mandatory employer contribution

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

On 12th May, The Government extended the furlough scheme until end of July 2020 in its current format.  From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

The scheme will continue in its current form until the end of July. Changes to allow more flexibility will come in from the start of August. More specific details and information around implementation will be made available by the end of this month.

You can make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

You may wish to start any redundancy consultation process in advance of the scheme ending, particularly if collective consultation obligations will be triggered.

Grants under the scheme cannot be used to substitute redundancy payments.

Your employees will still pay the taxes they normally pay out of their wages.

This includes pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension.

Employees still have the same rights at work, including:

• Statutory Sick Pay
• maternity and other parental rights
• rights against unfair dismissal
• redundancy payments

Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.

Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.

Because of illness, caring responsibilities, and operational disruption, apprentices may be unable to attend training, and training providers may be unable to deliver training, over the coming weeks or months.

This may be necessary:
-for an individual, due to illness or self-isolation, or challenges in getting to their place of employment or location for training provision
-for an employer, due to a temporary need to redeploy apprentices to different roles
-for a training provider, due to challenges in providing training or assessment due to staff absences or closure of facilities

UK Gov is encouraging and supporting employers, and training and assessment providers, to make use of distance-learning tools wherever possible and practicable to do so.

You can apply through the online claim portal; 

https://www.access.service.gov.uk/login/signin/creds

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities. To prepare to make your claim you will need:
• a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’
• be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’
• the following information for each furloughed employee you will be claiming for: Name, National Insurance number, Claim period and claim amount, PAYE/employee number (optional).
• if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee. If you have 100 or more furloughed staff – you will need to upload a file with information for each employee; HMRC will accept the following file types: .xls .xlsx .csv .ods.

HMRC has not issued guidance on when the outbreak’s effects on a business’s operations will be regarded as ‘severe’. And in the absence of any additional practical guidance to measure “severe affect”, several professional firms would advise employers to retain sufficient contemporary evidence of the impact to their business operations to support the basis on which a JRS claim was made.  Employers will therefore need to use their judgement in determining whether the JRS is intended for their circumstances.

As expected, HMRC have confirmed they reserve the right to audit retrospectively so employers will need to take care when submitting claims.

HMRC have outlined the following measures to ensure the JRS is directed as the Treasury intended;

• There will be a hotline for employees who feel that the scheme is being abused (e.g. if their employer still requires them to work during furlough);
• HMRC will clawback JRS payments in cases where the criteria are not met, and depending on the nature of the behaviours could take criminal action if there is deliberate action to defraud;
• HMRC will have the right to inspect records at a later date – the downstream review approach is still to be decided;
•  The 28 February cut-off date is a key protection against fraud, as is the online authentication process for existing employers.

We are continuing to ask for further details from Government on aspects that are currently unclear. Our questions include (but are by no means limited to):

• The guidance states that furlough leave must be for a minimum of three weeks. Can this be interrupted, e.g. if another employee who is still working falls ill and the employer needs a furloughed employee to return to cover the absence? 

• Can employers require employees to take holiday while they are on furlough leave (to coincide with an annual shutdown, and/or to avoid employers being faced with large numbers of employees wanting to take holiday after the COVID-19 crisis has passed)? If they can, will this simply be done by the employer giving notice in the normal way in accordance with the Working Time Regulations? Can a furloughed employee ask to take holiday while on furlough leave? And in both cases, will furlough pay count towards holiday pay and will the employer be required to make up the balance?
• Can employers furlough employees who refuse to come to work, but who are not vulnerable, shielding, or otherwise required to self-isolate, where there is still work for them to do?
• The guidance states that an employee who is on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February. Does this restriction apply to all types of unpaid leave, including the unpaid part of maternity leave, unpaid parental leave, etc. or only to unpaid lay-off?

• For employees who receive enhanced contractual maternity pay, the guidance states that this is included as wage costs that employers can claim through the Scheme. How does this work? Does it mean that employees will be on both maternity leave and furlough leave at the same time?
• Further clarification is needed on how to calculate furlough pay, e.g. whether bonus, commission and fees are the only payments that should be excluded, and what the calculation should look like for weekly paid employees.

Employers must discuss with their staff and make any changes to the employment contract by agreement (in line with employment law principles).   

On 16th April, The Treasury published the Treasury Direction that will govern the treatment of claims for grant under the Coronavirus Job Retention Scheme. The Direction does deviate from the already published Guidance in a number of respects. The key difference is that whereas the Guidance simply required the Employer to have notified the employee in writing that they were on furlough leave, the Direction (Reg 6.7) states that the requirement is that “the employer and the employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment.”  

A record of this communication must be kept for 5 years.  

If you have relied on and received actual consent this may not be an issue for you.

However it would be prudent to seek to cover all options going forwards. To that end we would recommend seeking some form of written agreement from employees.  

-Individuals are only entitled to the National Minimum Wage (NMW) for hours they work

-Furloughed workers, can be paid 80% of their salary (up to £2,500) even if this would be below NMW based on usual working hours

-Working from home (this will already have been implemented where possible in most cases).

– Short-time working – reducing hours and pay

        – This is not presently covered under the scheme

        – Where no contractual provision, consent should be sought

– Redundancies 

         – These should be approached with extreme caution

         – could be difficult to avoid unfair dismissal if it would have been reasonable to place employees on furlough

         – Consultation should take place if likely after furlough ends

Labour Relations Agency guide on redundancy:  https://www.lra.org.uk/sites/default/files/2020-05/Advisory%20Guide%20-%20Advice%20on%20handling%20redundancy%20May%202020.pdf

– Business interruption loans and grants to provide cash flow in interim (see finance section)

Yes, in a bid to prevent mass unemployment, both the British and Irish governments have introduced different schemes in which the state will cover a large percentage of employees’ wages as long as their employer agrees to keep them on the payroll.  The UK furloughing scheme is open to cross-border workers with addresses in the Republic of Ireland.  

Claimants who do not have enough money can apply for an advance on their first universal credit payment.  However this loan must be paid back when they receive their first payments.

The guidance now confirms that, if TUPE applies, employees transferred in after 28th Feb will be eligible to be furloughed.  What HMRC doesn’t give any guidance on is the complex legal position around TUPE and whether it applies.  We would recommend that transaction documents clearly state that the transfer is taking place on the basis that TUPE applies.  

Grants under the scheme are not counted as ‘access to public funds’ and employees on all categories of visa can be furloughed.

Claims may be retrospectively audited, and employers must retain relevant records (including the amount claimed for each worker, the supporting calculations, and the period covered by each claim) for five years.

There is a clear marker to action being taken if dishonest or fraudulent claims are made and payments will be withheld or payable in full if claims are based on dishonest or inaccurate information or found to be fraudulent.  

Workers must be furloughed for a minimum of three consecutive weeks, but can be furloughed more than once while the JRS runs.

The Treasury Direction indicates where furloughed employees were paid less than their minimum JRS entitlements between 29 February and 19 April (exclusive of both dates), the employer can still claim reimbursement for the amounts previously paid provided they pay the relevant shortfall to those employees before claiming the relevant amounts under the JRS.
This suggests that there is a risk that employers who defer employee payment until they receive funds under the JRS scheme may not be entitled to reimbursement for that initial period. However, the wording of the shortfall paragraph in the direction makes it difficult to interpret its proposed meaning and it would seem unlikely that it would be Treasury’s intent to restrict access to the grant in the circumstances. Clarification is being sought to confirm businesses’ obligations in this regard.

HMRC’s latest guidance states that employers cannot make more than one claim during a claim period and cannot make any changes to submitted claims.

You must apply by 20th of May to ensure payment before the end of May. Of course, you can apply after 20th May but won’t likely receive payment until June.

https://www.access.service.gov.uk/login/signin/creds

In light of the recently published Treasury rules and HMRC guidance, there are five areas that employers should review when submitting their JRS claims:

1.  Have you identified all eligible workers? As the JRS has been extended to qualifying workers who were on the payroll on (and who were notified to HMRC on an RTI submission on or before) 19 March 2020, rather than 28 February 2020, employers should ensure these individuals are considered in their furlough plans.
2.  Do you have written agreement to the furlough? Employers should ensure they hold a valid written record of the furlough agreement before the first claim is made.
3.  Have you identified all your ‘fixed rate employees’? In practice, many furloughed workers who appeared to be on ‘fixed pay’ based on HMRC’s earlier guidance will not be treated as ‘fixed rate employees’ under the Treasury rules. Employers should confirm that the basis on which they have categorised furloughed workers and calculated their reference pay is appropriate before submitting their claims. Furthermore, as HMRC’s current online calculatoronly supports fixed rate employees, additional care may be required to ensure the calculations for other employees are accurate as HMRC have not provided the means to allow employers to verify these calculations.
4.  Have reference pay components been correctly identified? Very broadly, the Treasury rules and latest HMRC guidance confirm that reference pay includes regular cash payments made under legally enforceable arrangements. However, the application of the rulesto individual remuneration packages can be complex. Employers should review the components that they took into account when calculating furloughed workers’ reference pay based on HMRC’s earlier guidance to ensure these are in line with the latest position.
5.  Do you need to make any ‘top up’ payments prior to your first claim? Furloughed workers who received less than the minimum JRS payment between 29 February 2020 and 19 April 2020 (exclusive) must arguably be paid the shortfall before their employer makes a claim for those payments. Employers should confirm whether they are required to make such a ‘top up’ payment in order to be able to reclaim these amounts through the scheme.Further clarification is being sought to confirm the intent behind the Treasury Direction in this regard.

Claims must be accurate and cannot be revised. Given that HMRC’s latest guidance (including the first worked examples) was made available only from the evening of 17 April and that the online calculator released on 20 April only currently covers fixed rate employees, employers should review their claims carefully before they are submitted to the HMRC portal.

You will need to explore the reasons for this carefully. Employees may be ill or self-isolating under government guidance (in which case they are likely to be eligible for statutory sick pay and possibly company sick pay depending on their contracts). They may also have concerns about contaminating vulnerable relatives or may have caring responsibilities (including for school age children).

In the first instance, if the employee can carry out his or her functions at home, then this should be put in place where possible at the employer’s discretion.  

If the operating circumstances allow for it, then temporary variations of working hours should be explored to  accommodate caring or travel arrangements (the government has advised against non-essential use of public transport for everyone and for commuters to vary travel times to avoid rush hour, where this is possible).  If doing so, they should be mindful of the need to consult with employees and seek their agreement to any contractual changes, as well as the risks of imposing contractual changes without agreement. 

Alternatively, a period of leave could be agreed.  In any case, staff should be reassured of the additional social distancing, health and safety and hygiene measures that the employer has put in place to protect their health, safety and well-being, so far as practicable. 

The Labour Relations Agency guide on handling redundancy;

https://www.lra.org.uk/sites/default/files/2020-05/Advisory%20Guide%20-%20Advice%20on%20handling%20redundancy%20May%202020.pdf

The Labour Relations Agency Redundancy consultation factsheet

https://www.lra.org.uk/resources/factsheet/coronavirus-covid-19-emergency-redundancy-consultation-factsheet

On 18 March, the Government announced that all schools would close after Friday 20 March, save that provision would be made to continue teaching for the children of key workers such as NHS staff, school staff and delivery drivers. This decision will inevitably have a significant impact on the workforce. 

Employers will therefore need to think carefully about whether home working is suitable if there are young children in the house; how much home-working they can accommodate; and what proportion of their workforce may need to take time out, and will need to work constructively with employees to find practical solutions.

Following the Government advice on social distancing issued on 16 March, employees who are able to do so may already be working from home. Following school closures, such employees may be able to continue with home working. 

However, it may be impractical for those with very young children to continue working and those with older children who require less supervision may nonetheless need some flexibility on hours in order to work around their child’s demands on their time. Employees who are not able to work from home may need to take time off work to look after their children. 

Employees have a statutory right to a reasonable amount of unpaid time off to deal with an emergency involving a dependent. “Dependent” includes a spouse, partner, child or parent, or a person who lives with the employee (but not a lodger). 

The right to take emergency leave is a right to a ‘reasonable’ amount of time off. The amount of time is not fixed. It is intended to allow an employee to deal with an immediate problem and put other care arrangements in place. 

Following school closures, therefore, employees could take emergency time off to care for their children. Employees should inform their employer as soon as reasonably practicable of the reason for their absence and how long they expect to be away from work. 

It is not currently clear how long schools will remain closed, so it would not be reasonable for employees to simply stay off work on emergency leave until such time as schools re-open. 

However, it would be reasonable for them to take one or two days off to try to arrange alternative childcare. Note, though, that finding affordable alternative childcare in the current circumstances could be problematic. For example, employees are unlikely to be able to ask grandparents to take on caring responsibilities given the stringent social distancing advice for the over 70s. 

For longer term arrangements, both employers and employees need to be flexible. It might be that arrangements can be made for employees to work flexibly while schools remain closed, with staggered start and finish times or reduced hours to enable employees to drop off and collect their children from alternative care providers. 

Employers may need to consider making broader changes to shift patterns to facilitate this. If doing so, they should be mindful of the need to consult with employees and seek their agreement to any contractual changes, as well as the risks of imposing contractual changes without agreement. Make UK members can access guidance on changing terms and conditions in the resources section of our website.

If changes to employees’ working arrangements to fit around their childcare needs would not be feasible, employees could take paid annual leave, or up to four weeks’ unpaid parental leave per child per year. Alternatively, the employer may be able to agree with the employee that they should be placed on furlough leave.

Note that if you subject an employee to detrimental treatment for taking emergency time off, or dismiss them or subsequently select them for redundancy because they took, or sought to take, emergency leave then they will be entitled to make a claim of detrimental treatment or unfair dismissal to an employment tribunal regardless of their length of service.