image Coronavirus – Job Retention Scheme
Created by helen on 3/26/2020 3:33:40 PM

The UK and the world are facing unprecedented pressures with regards to COVID – 19 (also known as Coronavirus).  People are now being ordered into “lockdown” and this raises some very serious questions and concerns from businesses that are unsure how to survive this pandemic.

On Friday 20th March, Chancellor Rishi Sunak announced a government-funded package available to thousands of businesses in the UK. The Coronavirus Job Retention Scheme will pay employees up to 80% of their normal salary/wage, in exchange for the company agreeing to keep these employees on the payroll.

What does this mean?

The government is asking that instead of “laying off” employees or making them redundant, you categorise these employees as “furloughed workers”. This will enable you, the business, to claim back up to 80% of their wages (to a maximum of £2500 per calendar month) from the government and continue to pay your employees.  It is then up to you as the employer, whether you are able to pay any of the additional 20% yourself, though you are not obliged to do so.

How do I claim this money?

The scheme is still in its early days, so information is limited, but the Chancellor has indicated that the business will make the claim through an HMRC Portal (which will be available soon) for up to 80% of their furloughed employee/employees’ salaries. No exact dates have been confirmed for the first payments, but the Chancellor indicated it would be before the end of April.

It has not been announced yet, how other payments will be affected – for example, NI and contributions to pension schemes.

Can I do this for all of my staff?

Yes and No. You can only claim this package if that employee would have been laid off/made redundant. If you had planned to do this to all staff, then yes you can claim for them all – however, whilst claiming this 80% they may NOT do any work for you or the company. If you had planned on making half your staff redundant/laid off, then you can only claim for these employees, you cannot claim for staff that you were continuing to employ, you will be expected to pay these staff as normal.

You can also claim for any freelancers, contractors and casual workers you regularly employ, they will receive 80% of their average weekly salary. If you work with self-employed contractors or businesses, they do not qualify. However, there has been separate guidance released regarding to anyone who is self-employed.

The good news is that the government will allow you to backdate this to the 28th of February 2020. So any employees you have laid off/made redundant after that date, can be added back onto your payroll and subsequently claimed for. It is important that ALL furloughed workers be kept on your payroll.

No information or guidance has been released as yet regarding people employed after 28th February 2020, or people due to start new jobs in the near future.

How do I decide which employees to furlough?

Continue using normal criteria and guidance for making redundancies and laying staff off to ensure the process is not discriminatory in any way. You can force employees to furlough IF their contract states you, as a business have a right to “lay off” staff. If this isn’t included in their contract, then you would need to discuss this with the employee and require their agreement to furlough them (ensure the appropriate changes are then made to their contract carefully and fairly).

Currently, the information suggests that any furloughed employees will continue to accrue holiday and all staff (including those made redundant since 28th February and now) will still have continuous employment and therefore won’t lose any employment rights they currently have.

The scheme is very clear that it is only available to people who would have been left unemployed so you need to be careful when justifying who to furlough and consider whether your business could continue as normal without them outside of this unique situation.

If you have any staff needing time off that you wouldn’t be making redundant then they do not qualify and would need to take holiday, unpaid leave or sick leave depending on their individual situation.

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