Job Retention Scheme - Details

• The Government guidance confirms that employees placed on furlough may be able to have 80 per cent of their wages paid through the scheme by a non-repayable government grant, up to a monthly cap of £2,500.
• The scheme will be administered by HMRC via an online portal. It is unlikely this will be operational until the end of April.
• The scheme is available to all UK businesses with employees on the payroll at 28 February 2020.
• Employers intending to make a claim, should still pay their employees and process this through their payroll. If they only intend to pay the 80% this is the amount that should be processed.
• On top of the 80% salary, employers can also claim for the employer’s national insurance contributions and employer’s pension contributions relevant to the period. Therefore, you could claim a maximum monthly grant of £2,804 (based on an employee qualifying for the maximum monthly earnings).
• Employees who have been furloughed should not undertake any work that amounts to making money for their employer or providing services to them. If workers are asked to undertake training whilst on furlough, they should be paid in line with the national minimum wage even if this is above the 80 per cent.
• Employers can make claims for grants to cover furloughs that last for a minimum of three weeks and up to a maximum of three months, however the guidance indicates that this may be extended.
• Workers will still be liable to pay Income Tax, National Insurance and any other deductions from their wages. They can also be placed on furlough more than once.
• In claiming the grant provided, employers will need to submit claims on behalf of their workers. It outlines that workers must have been on the company’s PAYE from at least 28 February 2020. All workers are eligible to benefit from the grant, including those on zero-hour or temporary contracts. For those who are on general sick-leave, or are isolating in line with government guidance, they should receive statutory sick pay (or sick leave pay in line with their employment contract) for this period and then be furloughed after this.
• The grant will cover the period from the day employees are furloughed and will be backdated until 1 March 2020. If your client is receiving public funding specifically to provide services deemed necessary by the government to tackle the coronavirus outbreak, they should not seek to furlough staff.
• Workers who were made redundant after 28 February can be re-employed and placed on furlough instead. The grant will still cover their wages for this period of time. Additionally, workers placed on furlough can still be made redundant. They can also be made redundant if they refuse to go on furlough. However, usual rules on redundancy will apply.
• For workers who are taking family leave, such as maternity, adoption or paternity leave, they should receive statutory rates as normal and usual rules surrounding the taking of this leave should apply. As a reminder, statutory family leave is currently £148.68 per week and is rising to £151.20 per week from April 2020. If your client provides enhanced pay to workers taking family leave, they can claim for the money to cover the additional amount through the scheme.
• For workers who are due to start family leave, they should do so as usual. If they have been placed on furlough or sick pay in the lead up to this, it may affect the amount of statutory pay they are entitled to.

For more information please contact us.