Coronavirus Job Retention Scheme guidance & updates
Employment lawyers Matthew Clayton and Jenny Hawrot summarise the latest developments on the Coronavirus Job Retention Scheme to emerge.
Friday 8 January 2021
HMRC has issued additional guidance regarding furlough and employees who are affected by COVID-19 as a result of their poor health, or their caring responsibilities.
In the latest guidance, HMRC states that employers can be furloughed if they cannot work, or need to work reduced hours, if they:
- “…are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance”, or
- “have caring responsibilities resulting from coronavirus (COVID-19), such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in their household.”
This does not mean that employers must furlough these employees, or that they have to grant the employees’ request. It just means that the employer is able to make a legitimate claim for these employees under the Coronavirus Job Retention Scheme, if they decide to furlough them and/or agree to an employee’s request because of one of the above reasons.
This refreshed guidance will be welcomed by employers and employees alike, giving broader flexibility for those who are struggling with their regular working arrangements as a result of coronavirus.
The update from HMRC comes after a TUC survey revealed that one in six working mothers has had to reduce their working hours due to lack of childcare or school closures.
If you are an employer seeking guidance on the Coronavirus Job Retention Scheme or any related issues, please get in touch for support.Contact Us
Thursday 17 December 2020
The UK government has announced a further extension of the furlough scheme (Coronavirus Job Retention Scheme) by an additional month, to the end of April 2021. The government appears to have kept the terms of the scheme the same.
Friday 6 November 2020
On 5 November, Chancellor Rishi Sunak announced further details of the extension of the Coronavirus Job Retention Scheme (CJRS) , also known as ‘furlough’.
This is what we know so far:
- The Government will pay 80% of furloughed workers’ wages for any unworked hours, up to a cap of £2,500 per month. Importantly, the £2,500 cap is proportional to the hours not worked.
- Employers must pay employer’s NICs and pension contributions for any unworked hours.
- The furlough scheme will be extended until 31 March 2021, rather than just for the duration of ‘Lockdown 2’, as first announced.
- As was the case previously, any agreement to furlough workers must be in writing.
- Employees do not need to have been furloughed under the CJRS previously.
- Employees that 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, subject to conditions.
- The £1,000 job retention bonus is no longer payable.
- In January, the Government will review its level of contributions for unworked hours in February and March 2021.
- The Job Support Scheme is on hold indefinitely.
Specific guidance from the HM Treasury is due next week, but in the meantime, they have published some information here.
Tuesday 3 November 2020
On Saturday 31 October, the Government announced ‘Lockdown 2’, from Thursday 5 November, to Wednesday 2 December.
The Job Support Scheme, due to commence on 1 November 2020, has been delayed until December, and the Coronavirus Job Retention Scheme (also known as furlough), due to end on 31 October, has been extended to last until the end of Lockdown 2 (including the first four days of November).
So, what does that mean for employers?
We are still waiting for specific guidance from HM Treasury, but their press release indicates that the extended furlough scheme will mirror that which was in place in August this year.
Any agreement to furlough employees must be recorded in a written agreement between the parties following any appropriate consultation with staff.
Employers can furlough staff either flexibly, or full time. The government contribution will rise to 80% of wages for hours not worked (capped at £2,500), and employers must pay NI and pension contributions.
To be eligible, staff need to be on the PAYE real time payroll submission on or before 30 October 2020. There has been no confirmation that the employer and staff member need to have used the CJRS scheme previously, to qualify for furlough in Lockdown 2, although, we await specific guidance in this regard.
We expect the Treasury guidance by the end of the week, so watch this space.
Friday 23 October 2020
The government has now published further details about the changes to the Job Support Scheme announced by the Chancellor yesterday.
There will be two Job Support Schemes (JSS), to be known as JSS Open and JSS Closed. JSS Closed is for businesses required to close under lockdown regulations.
Thursday 24 September 2020
To help steer businesses and employees through a tough winter and avoid the much-feared ‘cliff-edge’ as the furlough scheme comes to an end, today Chancellor Rishi Sunak has introduced a range of business support measures. Read more in our article about the Job Support Scheme.
Friday 31 July 2020
The redundancy pay of furloughed workers who lose their jobs from today (Friday 31 July) will be based on their usual wages, not the reduced furlough rate.
The move by the government clears up concerns that furloughed workers facing redundancy would be short-changed as a result of receiving reduced pay over recent months.
Statutory notice pay will also be based on usual wages as opposed to the 80% received whilst on furlough.
Unfair dismissal payouts will also be based on normal pay rather than the reduced rate under the furlough scheme.
The news comes as the Coronavirus Job Retention Scheme begins to taper down, with businesses now having to pay pension contributions and National Insurance for furloughed workers, along with 10% of their salaries from September.
Wednesday 8 July 2020
Chancellor Rishi Sunak has today announced plans to give UK businesses a £1,000 bonus for every employee they bring back from the furlough scheme from November to January. The employee must be continuously employed through to 31 January 2021 and must have been paid at least £520 on average in each of November, December and January.
Wednesday 1 July 2020
Businesses will have the flexibility to bring furloughed employees back to work part time from today as part of the government’s plan to re-open the UK and kick-start our economy.
Friday 29 May 2020
The government announced more details about the extension to the Coronavirus Job Retention Scheme to include the last date for furloughing, an update on part-time workers and employer contributions. Click here to read detailed summary from our employment lawyers.
Thursday 14 May 2020
The government has published guidance today on holiday during furlough. In brief: workers who have been placed on furlough do continue to accrue their holiday entitlement and employers can require workers to take holiday. Click here to read more detailed advice from our employment lawyers.
Tuesday 12 May 2020
Chancellor Rishi Sunak has today announced that the government’s coronavirus job retention scheme will be extended until the end of October 2020. In addition, from August, furloughed staff will be able to be brought back to work, part time.
The chancellor also advised that there will be no change to the level of support for employees, but that this support will be shared between the government and employers. Unfortunately, no further details were given. More details are promised by the end of May.
Friday 17 April 2020
On Friday 17 April 2020 there were two developments in relation to the government’s Coronavirus Job Retention Scheme (CJRS). Firstly, the Chancellor of the Exchequer announced that the CJRS would run until 30 June 2020 rather than 31 May 2020.
Secondly, HMRC changed its online guidance to clarify that it is possible to take annual leave while on furlough, as we had previously (if tentatively) thought was the case. The guidance now also says that the employer must ‘top up’ holiday pay to 100% of normal pay. What workers on furlough should be paid for holiday pay is really something for the employment tribunals, and not HMRC, to decide. However, as expressed in our earlier article, we think there are strong HR policy reasons for doing this anyway, and the HMRC guidance probably gives a good indication of which way the employment tribunals would decide the question, if asked.
The HMRC guidance does not comment on whether an employer can compel an employee to take annual leave while on furlough. The advantage for an employer of doing this would be to reduce the glut of holiday requests which can be expected later in the year when restrictions are (hopefully) lifted. There is some divergence of legal opinion on this question, but we think that, if annual leave can be taken during furlough leave, then the normal rules about directing workers to take holiday on particular dates must apply.
As we have come to expect by now, the picture is an ever-changing one, and the updated guidance warns us that “during this unprecedented time, we are keeping the policy on holiday pay during furlough under review.” So – watch this space!
Wednesday 15 April
On 15 April 2020 HMRC further updated its guidance on the Coronavirus Job Retention Scheme. HM Treasury also published its ‘Direction’ to HMRC under the Coronavirus Act 2020. This document forms the legal basis for the CJRS and is likely to be the most definitive form of the scheme rules that we will see, although it is subject to change at any stage!
The main things we have learned from these two developments are as follows:
1. It is now beyond doubt that there is no need to prove that employees being furloughed would otherwise have been made redundant.
The scheme applies to employees who have been furloughed “by reason of circumstances arising as a result of coronavirus or coronavirus disease.” This would seem wide enough to encompass employees furloughed because they need to look after their children as a result of the Covid-19 related closure of education and childcare settings, and employees furloughed because they have been officially advised to ‘shield’ due to being in an ‘extremely vulnerable’ category.
2. The employee must have been instructed by the employer to cease all work in relation to their employment, and this will only occur if it has been agreed in writing between employer and employee (including in an email).
Note the word ‘agreed’; any unilateral furloughing which has already taken place may not be valid.
3. The only work a company director can do while furloughed is “to fulfil a duty or other obligation arising by or under an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company.”
This is very narrow in scope and does not encompass any commercial activity.
4. A claim on the CJRS can be made in respect of employees who were taken on between 1 March and 19 March inclusive, however only if they were the subject of an RTI submission to HMRC within that period.
This effectively means that monthly paid employees taken on during that period (who would not be paid until the end of the month and hence would not have been the subject of an RTI submission on or before 19 March) would not be eligible. However weekly paid employees might be, if they had been on the payroll on or before 19 March. The reason for the distinction is that RTI submissions are the only realistic way that HMRC has of checking the validity of claims.
5. A claim on the CJRS can only be made in respect of salary or wages which “is not conditional on any matter.”
If the employer has stipulated that pay during furlough is conditional on receiving funding from the CJRS, or can be recouped if that funding is not forthcoming, it may be disqualified from making a valid claim on the CJRS.
The guidance is still fairly vague; there are lots of questions that need to be answered and gaps to be filled. That may be done by amendments to the Treasury Direction or further guidance. We will keep you updated.
We’re here to help
We appreciate that it is a confusing and uncertain times for employers, but we’re here to help.
Our employment law team is fully equipped to advise you on your rights and obligations in this most unusual situation and how best to implement this guidance across your workforce.
Our legal services are operating as normal, with all of our lawyers able to work safely from home.
Please call 01242 514000 or email Matthew Clayton in our employment law team and we will be delighted to help.Email Matthew
We’re regularly updating our website with more COVID-19 legal insights, so keep an eye on this page for the latest legal perspectives relating to the coronavirus.