Update….. Coronavirus Job Retention Scheme Guidance
On Thursday 9 April 2020 HMRC provided further updates (clarifications) to the Coronavirus Job Retention Scheme guidance for employers. Read this post which serves as a reminder about what this scheme is, who can claim, and what some of the key changes are….
What is the Scheme For?
Before looking at the key changes, I have reproduced the first paragraph of the guidance. I have done this because I still feel there is confusion over what this scheme is designed to do.
“If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay”[1]
So the key principle is that this scheme is designed to help employers who genuinely cannot maintain their workforce because their operations have been hampered by the pandemic. The scheme is not designed to save otherwise genuinely redundant employees, or those incapable of work for example through poor performance or sickness.
Quick Recap of Who Can Claim
Any entity with a UK payroll can apply and this includes businesses, charities, recruitment agencies and public authorities. Applicants must have:
- created and started a PAYE payroll scheme on or before 19 March 2020
- enrolled for PAYE online– this can take up to 10 days
- a UK bank account
Summary of Changes
Employers can switch employees from sick pay to furlough and vice versa. That said, the guidance needs to be carefully reviewed. HMRC have made it clear that the scheme is not intended for short term sickness absence and there is a minimum 3 week furlough period. Also, bear in mind that if an employee is on sick leave then the employer remains liable to pay their sick pay (aside from the initial 2 week clawback available).
Employers can place employees who are shielding employees on furlough. HMRC define shielding as a measure to protect extremely vulnerable people by minimising interaction between those who are extremely vulnerable and others. This means that those who are extremely vulnerable should not leave their homes, and within their homes should minimise all non-essential contact with other members of their household.
Employers of newly TUPE’d employees can put them on furlough: “A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.”
NEED HELP?
All the team at Lincs Law Employment Solicitors remain available to give employment law advice. However, for the safety of everyone, this is being provided remotely. Don’t hesitate to get in touch via our website at www.lincslaw.co.uk or call 01522 440512.
Sophie Goodwill
Director, Employment Law Solicitor
[1] https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme?utm_source=22073d98-c3f4-47e3-b012-3fa9f1a81e4e&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate#payroll-consolidation
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