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Coronavirus Job Retention Scheme FAQ: What it means for employers

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Editor’s note: This article was first published on 17 April 2020 and is being updated regularly.

The Coronavirus Job Retention Scheme (CJRS) was the lifeline that many employers had been hoping for when it was announced in March 2020.

Since that time, the government has evolved the scheme and introduced additional rules. Most recently, these changes have focused on reintegrating a workforce within the business, and winding down the scheme in October 2020.

From March through to the end of July 2020, the scheme means staff can be temporarily given a leave of absence while the government pays 80% of their salaries (plus employer National Insurance, and the minimum mandatory employer pension contribution).

From July through to October 2020, the rules of the scheme change each month to introduce flexibility and allow businesses to bring employees back part time – something referred to as flexible furlough.

This is accompanied by a tapering scheme starting in August that requires employers to gradually increase contributions to furloughed wages, regardless of whether the employee is full-time or part-time furloughed.

Additionally, the scheme was closed as of 1 July 2020 to employees who haven’t previously been furloughed, except those returning from parental leave or who were reservists in the armed forces and are now returning to work only to be furloughed.

Below, we attempt to answer some of the essential questions around the CJRS along with its new rules, using the government guidance as a source, including how to make a claim (see question six).

Please note that we refer to employees in a general sense. Within employment law, there is a difference between employees and workers. Generally speaking, the scheme applies to both (see question four, Which employees are eligible under the Coronavirus Job Retention Scheme?).

1. How much can I claim under the Coronavirus Job Retention Scheme?​

2. How long does the Coronavirus Job Retention Scheme last for? And how long can I furlough staff for?​

3. Who pays the salaries for furloughed employees under the Coronavirus Job Retention Scheme?​

4. Which employees are eligible under the Coronavirus Job Retention Scheme?​

5. What employers or businesses are eligible to furlough and claim under the Coronavirus Job Retention Scheme?​

6. How do I claim under the Coronavirus Job Retention Scheme?​

7. If I’ve reduced an employee’s hours (or their pay), can I claim for them under the Coronavirus Job Retention Scheme?​

8. Do I have to furlough all my staff under the Coronavirus Job Retention Scheme?​

9. When do I get repaid the money for the Coronavirus Job Retention Scheme?​

10. What adjustments do I have to make in my payroll run for furloughed employees under the Coronavirus Job Retention Scheme?​

11. How much do I have to pay my staff via the Coronavirus Job Retention Scheme?​

12. What happens to pension payments under the Coronavirus Job Retention Scheme?​

13. What taxes are paid with the Coronavirus Job Retention Scheme?​

14. How are benefits-in-kind treated under the Coronavirus Job Retention Scheme?​

15. How do I furlough and claim under the Coronavirus Job Retention Scheme for an employee whose pay varies?​

16. Can I charge my employees a fee to administer the Coronavirus Job Retention Scheme?​

17. What checks will be in place for the Coronavirus Job Retention Scheme?​

18. Can agency staff be furloughed under the Coronavirus Job Retention Scheme?​

19. Can I furlough myself under the Coronavirus Job Retention Scheme?​

20. How do I tell staff they’re furloughed under the Coronavirus Job Retention Scheme?​

21. Does furloughing via the Coronavirus Job Retention Scheme need a new employment contract?​

22. Do I have to pay just 80% of the salary under the Coronavirus Job Retention Scheme?​

23. When does the Coronavirus Job Retention Scheme end?​

24. Can employees work while furloughed under the Coronavirus Job Retention Scheme?​

25. How are staff on statutory leave or pay affected by the Coronavirus Job Retention Scheme (e.g. maternity leave)?​

26. What happens to employee annual leave during furloughing via the Coronavirus Job Retention Scheme?​

27. Can I use the Coronavirus Job Retention Scheme funds to make somebody redundant?​

28. Are charities allowed to use the Coronavirus Job Retention Scheme?​

29. Can an employee demand or ask to be furloughed under the Coronavirus Job Retention Scheme?​

30. Are there any commitments at the end of the Coronavirus Job Retention Scheme?​

31. How long do I have to keep documents relating to my Coronavirus Job Retention Scheme application?​

32. How do you pronounce ‘furlough’?​

Until 31 July 2020, the original CJRS rules continue to apply. Following this date, new rules apply. Both are detailed below.

However, in general the CJRS rules say you can claim for regular payments that constitute an employee’s salary, and this can include past overtime, fees, or compulsory commission payments.

However, you can’t include discretionary payments such as tips, non-compulsory commissions, and non-cash payments.

Payments-in-kind or salary sacrifice complicate things a little – see question 14 (How are benefits-in-kind treated under the Coronavirus Job Retention Scheme?).

It’s important to note that you are not claiming for the costs you incur for wages and payroll (including such things as employer NI, until the end of July 2020).

You’re only allowed to claim for what constitutes an employee’s salary, as outlined above.

You can’t keep or deduct anything from the money you get. You must pay your employees all of the grant received that relates to salaries and must pay any amounts received in relation to pension contributions into employee’s pension schemes. You must always pay at least 80% of employee’s reference earnings, even when making your own contributions.

You must pay employer NICs to the government as usual through your payroll. In other words, you will pay employer NICs and then claim them back via the scheme until August 2020, and then you will be paying them as usual, based on the amount of earnings paid to the employee.

If you have elected to top up employees’ earnings above the value of the grant claim, you must also pay the employer NICs on these earnings. The employee continues to pay employee NICs and tax through PAYE and your payroll, as usual.

Of course, you can pay employees a salary of more than 80% of the furloughed employee’s reference earnings. Some employers are choosing to pay 90% or 100% of the salaries of furloughed employees, making up outstanding amounts from their own funds.

Up to 30 June 2020, there was no limit on the number of employees you could furlough and claim for under the scheme.

From 1 July 2020 until the end of the scheme, you can only furlough employees who have previously been furloughed.

An exception is made for employees who have returned from statutory parental leave (such as maternity or adoption leave) after 10 June 2020 and who were on the payroll as of 19 March 2020. Returning military reservists are also excepted in this way.

Note that above limitation means the cut-off date for any employee you wish to furlough after 1 July 2020 was effectively 10 June 2020, because employees must be furloughed for a minimum of three weeks under the scheme (see question 2, below).

CJRS claims until 31 July 2020

Until the end of July, you can claim up to 80% of a furloughed employee’s gross salary per month (that is, before tax, employee National Insurance and other statutory deductions such as student loan repayments are deducted).

The amount you can claim per employee as an earnings contribution is capped at £2,500 per employee, even if they have more than one job with you. This is known as the reference earnings.  This is 80% of £3,125.

On top of this, for this period you can also claim for their employer National Insurance contributions (known as ER NICs), and their minimum (mandatory) automatic enrolment employer pension contribution.

CJRS claims after 31 July 2020 until the end of the scheme

From 1 August 2020, you will be expected to pay a contribution towards the JRS grant for each employee. Additionally, separate claims must be submitted for each month, which is to say, claims cannot run across more than one month.

The rules are as follows:

  • August 2020 payroll:You can continue to claim up to 80% of a furloughed employee’s reference earnings, as described earlier. However, from August 2020 onwards, and until the termination of the CJRS in October 2020, you are required to contribute any ER NICs and mandatory pension contributions for the employee.
  • September 2020 payroll: You can claim for 70% of furloughed employees’ reference earnings, up to a maximum claim of £2,187.50 per employee. You must contribute the 10% shortfall yourself to bring the wage up to 80% – and remember that you cannot pay an employee less than 80% of their usual wage (or 80% of £3,125 if they normally earn more) if you use the CJRS. As with the August 2020 payroll, you also pay ER NICs and pension contributions.
  • October 2020 payroll: You can claim for 60% of reference earnings, up to a maximum claim of £1,875 per employee. You must contribute the outstanding 20% yourself, to bring the wage for the furloughed worker up to the mandated 80%. Once again, you’re also required to pay ER NICs and pension contributions.

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The scheme began on 1 March 2020 and will close at the end of October 2020. Employees can be furloughed for the whole of this eight-month period.

The minimum amount of time they must be furloughed for in order to claim under the scheme varies:

  • Until 30 June 2020: The minimum claim period was three consecutive weeks.
  • From 1 July 2020 until the end of the scheme: The minimum furlough claim period is seven days unless the number of remaining days in the pay period within the calendar month is less than seven. In this situation, the claim can be for less than seven days.

Employees can be furloughed multiple times under the scheme, returning to work (and your ordinary payroll) in between times if so required, provided this is within the CJRS guidelines.

As an alternative to furloughing staff for all their usual working hours, from 1 July 2020, employees can be brought back to work part time via the Flexible Furloughing rules.

This means employees are brought back to work part-time shift patterns, of any type agreed between yourself and the employee.

You claim under the CJRS only for the hours the employee is furloughed and therefore not working when they would otherwise normally do so. You will pay them their usual salary for the times when they are working, pro-rata.

You pay the salary within the limitations mentioned in question one (How much can I claim under the Coronavirus Job Retention Scheme?). You then claim some or all of that money back from the government before, during or after the payroll run.

If you’re unable to pay salaries because of cash flow issues caused by coronavirus disruption, you might benefit from one of the other government-funded coronavirus schemes: a business rates holiday, the Coronavirus Business Interruption Loan (or Bounce Back Loan Scheme), or one of the coronavirus business grant schemes (depending on eligibility).

The various loan schemes, in particular, may provide a solution because interest and fees for the loans are paid by the government for the first 12 months, making it an inexpensive way to get bridging funds.

Most of your employees or workers will probably be eligible for you to furlough and claim within the following criteria:

  • The employee must have been paid through your PAYE payroll on or before 19 March 2020 (the previous date was 28 February 2020). Those who you employed after this date or employed but had not yet paid by this date are not eligible for the scheme.
  • As of 30 June 2020, the employee must have been previously furloughed already under CJRS for at least three consecutive weeks, although those returning from statutory parental leave and returning military reservists do not need to have been previously furloughed, so can be furloughed following 30 June 2020.
  • All types of employment and employment contracts are included, including full time, part time, agency workers, flexible workers, and zero-hour contracted workers – see question 15 (How do I furlough and claim under the Coronavirus Job Retention Scheme for an employee whose pay varies?) for employees who work irregular hours.
  • Foreign nationals who work for you are eligible too.

If you made employees redundant after 19 March 2020, or they resigned, they are eligible for the scheme. But you will need to update your payroll to remove their termination, and send an updated Full Payment Submission (FPS) to HMRC.

You can re-employ them, furlough them, and claim their wages as outlined in question one (How much can I claim under the Coronavirus Job Retention Scheme?).

Employees on fixed-term contracts are also eligible. If their contract ends during the furlough period you can either extend it, as you might in any other circumstance, or end it, at which point you will not be able to furlough and claim for them.

Your operation must be running a UK PAYE payroll. You don’t necessarily need to be an incorporated business, for example, and there are no size restrictions with relation to turnover.

If you have your base or office outside the UK, you are included – provided you run a UK payroll. You can furlough and claim for any number of employees.

However, employers must also have the following in place:

  • A UK PAYE payroll scheme that was still operational on 19 March 2020 (the cut-off date was 28 February but that has since been extended). This means the employee must have been in the Full Payment Submission (FPS) data sent as part of the Real Time Information(RTI) reporting to HMRC that must be sent before or when a payroll is run. You can’t furlough and claim for employees on a payroll created or started after this date.
  • Be enrolled for PAYE Online– although you can register for this now if you aren’t already (the government says the process can take up to 10 days).
  • A UK bank account.

For each payroll run, you’ll need to claim via an online service provided by HMRC, which opened on 20 April 2020, at which point claims could be backdated to 1 March 2020.

Note the following for claims for June and July 2020:

  • The first time you will be able to make claims for days in July will be 1 July. You cannot claim for periods in July before this point.
  • 31 July is the last day that you can submit claims for periods ending on or before 30 June.

Before you start making any claim, check to ensure your payroll and employees are eligible for the scheme – see questions four and five above.

The service walks you through step-by-step in order to make a claim. You’ll need to input information as listed below. The application process doesn’t require you to use your payroll software, although you’ll probably need certain information stored within it.

Once you’ve applied, you’ll be given a claim reference number, at which point HMRC will check your claim to ensure it’s correct. You should tell your employees you’ve made a claim and that they do not need to do anything more.

You must have also worked out how much you intend to claim, which will be based on your payroll. The government offers a calculator that you can use to help you work this out.

You’ll need to gather quite a few details before making the application.

Note that you or your payroll agent can apply, but if you use a ‘file-only agent’ (one who files your Real Time Information return but doesn’t act for you in other matters), you must claim yourself. The file-only agent will be able to provide the details you need if you don’t already have them to hand.

How you claim depends on whether you’ve furloughed 100 or more employees.

Claiming under the Coronavirus Job Retention Scheme for 1-99 employees

Details about your business and the claim you or your agent will need are as follows:

  • Your UK bank sort code and account number.
  • Your employer PAYE scheme reference number.
  • Your name (or the employer’s name if you’re an agent).
  • The Government Gateway user ID and password you got when you registered for PAYE Online.
  • Your company’s Corporation Tax unique taxpayer reference, and your company registration number (if your business is incorporated).
  • Your Self Assessment unique taxpayer reference (if you’re self-employed).
  • The start date and end date of the claim.
  • The full amount you’re claiming for, including employer National Insurance contributions and any employer minimum pension contributions.
  • A phone number and a contact name.

Details about your employees you or your agent will need:

  • The total number of employees you’ve furloughed.
  • Each of their National Insurance numbers (your employees can find their NI numbers via the free HMRC app).
  • Optionally, you can also provide each of their payroll or employee numbers.

Claiming under the Coronavirus Job Retention Scheme for 100 or more employees

Those who wish to claim for 100 or more furloughed employees will need to create a spreadsheet file containing the following details, with each employee occupying one line of the spreadsheet:

  • The full name of each employee.
  • The employee’s National Insurance number.
  • The furlough start date for that employee.
  • The furlough end date for that employee, if known.
  • The full amount claimed for that employee.

You can optionally provide the following:

  • The payroll number for that employee.

You’ll need to upload this file when requested during the application process.

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If you reduced an employee’s hours or pay independently of a CJRS claim then, unfortunately, you will not be able to claim in retrospect.

This remains true did even if you took these actions as a direct result of coronavirus disruption, or in a bid to avoid having to lay-off staff.

However, as of 1 July 2020, employees can work part time under the CJRS via the Flexible Furloughing rules, provided they’ve previously been furloughed (or were on statutory parental leave or are returning military reservists).

This means employees can work part-time shift patterns, of any type agreed between yourself and them.

You claim via the CJRS only for the hours the employee is not working when they would otherwise normally do so. You will pay them their usual salary for the times when they are working, pro-rata.

Initially you could furlough and claim for any number of staff – from just one, all the way through to all of your staff.

However, as of 1 July 2020 you can claim only for those who have previously been furloughed, or who have returned to work following statutory parental leave, or who are military reservists returning after the above date.

The government has provided some examples of calculations to help you work out flexible furloughing for your employees.

You’ll need to claim via an online service provided by HMRC, which opened on 20 April 2020. HMRC says that applicants can expect a payment to be in their bank account within six working days after submission of the claim.

However, HMRC adds that you should allow at least 10 working days for the payment to arrive before raising a query via the helpline due to high call volumes at its call centres.

If you face cash flow issues running your payroll, it’s also worth considering the other coronavirus schemes.

If you are funding the difference between the government grant and the normal salary then you will not need to make any changes to your payroll. That is, no changes are required if you’re paying 100% of salaries to employees.

However, many businesses may not be able to afford this and you will probably need to manually reduce furloughed staff salaries to 80% of their reference salary up to the maximum grant claim each month. HMRC will not do this for you.

The government has revealed more detailed guidance on the Flexible Furlough part of the scheme, if you decide to adopt it.

Seek help from your payroll provider if you need help undertaking how to run a payroll under the CJRS. See question 15 (How do I furlough and claim under the Coronavirus Job Retention Scheme for an employee whose pay varies?) if the employee’s hours or salary usually vary.

If you pay employees more than the 80% outlined by the scheme (for example, you opt to continue paying 100% of salaries), this should be a separate payment line within your payroll for identification purposes.

This depends on how the employee is furloughed.

  • Full-time furlough: You should pay each employee 80% of their reference earnings before deductions. Of course, you can pay them more than this if you make up the shortfall.
  • Flexible furlough: For each hour the employee works for you, you should pay them their usual salary, pro-rata (including all applicable NICs, pension contributions, and so on). For the hours the employee is not working for you – that is, the working hours in which they are furloughed – you must pay them 80% of their reference earnings and then claim the amount back via the CJRS, according to the monthly rules for March-July, August, September and October outlined in question 1 (How much can I claim under the Coronavirus Job Retention Scheme?).

You cannot keep any of the cash you claim under CJRS for yourself, regardless of any costs you incur. All the CJRS cash you receive must be passed to the employee(s) and relevant pension scheme.

If you do not pay the full amount of the grant to your employees (less the employer’s National Insurance contribution and pension contribution elements), then you will need to repay 100% of it back to HMRC.

If you fail to tell HMRC that you have not paid all of the CJRS funds received to employees and pension schemes, you may be have to pay HMRC an additional penalty of 100% of the value of the grant, in addition to repaying the grant.

As the government explains, the importance of the scheme is measured in several different ways: “[The scheme] is designed to help employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy.”

The employee continues to pay taxes and National Insurance out of their wages, just like they would normally – see question 13 (What taxes are paid with the Coronavirus Job Retention Scheme?) below.

Until 31 July 2020, you can claim under the scheme for the minimum (mandatory) automatic enrolment employer pension contributions, in addition to the 80% of reference earnings as outlined in question one (How much can I claim under the Coronavirus Job Retention Scheme?).

As of 1 August 2020, and for subsequent payroll runs until the scheme ends in October 2020, you pay the pension contributions up to a ceiling of £2,500 per employee, calculated as a combination of that provided by the CJRS and your own contributions.

Regardless of which month you’re claiming for, you can’t claim for additional pension contributions you make because you’ve chosen to top up your employee’s salary.

Whether the employee continues to make pension contributions while furloughed is their choice. You may wish to communicate with them and suggest a pension payment holiday, if the pension scheme allows this.

Of course, if the individual opts out of pension payments then you will not be able to claim the corresponding minimum automatic enrolment contribution under the scheme.

There are two sides to this question, relating to the employer and the employee.

Employer: Money you claim under the scheme must be included as income in your calculation for Income Tax and Corporation Tax, in accordance with normal principles.

You can deduct employment costs as normal from your taxable profits.

Employee: You must deduct employee tax and NICs as usual via the payroll on the salary you pay them under the scheme.

You must pay employer NICs too, and the minimum mandatory pension contributions, although until 31 July 2020, you can claim these back under the scheme along with the salary as outlined in question one (How much can I claim under the Coronavirus Job Retention Scheme?).

The salary you pay and subsequently claim under the scheme as outlined in question one (How much can I claim under the Coronavirus Job Retention Scheme?) must not include the cost of non-monetary benefits provided to employees.

This includes benefits-in-kind, or benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay.

In other words, if an employee earns £2,500 per month but their salary is listed as £2,000 because of a salary sacrifice scheme that pays £500 towards their pension, then you can only claim for 80% of £2,000 until 31 July 2020, and subsequently less in the months following (see question one).

This must be communicated to the employee.

However, if the individual opts out of the benefit or salary sacrifice scheme, you can increase their salary to its full contractual amount and use this as a basis for your claim. Again, this option must be communicated to the employee.

Some benefit or salary sacrifice schemes don’t allow opting out outside of extraordinary circumstances, such as major life changes – marriage or serious illness, for example.

The government says: “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.”

If the employee has been with you for 12 months or more, you must use as a reference salary the higher of either the same month’s earnings in 2019, or the average monthly earnings for the 2019/20 tax year.

If the employee has been employed for less than 12 months, simply claim for 80% of the average monthly earnings since they began working for you up to the £2,500 earnings cap.

If the employee began in March 2020 (the cut-off date for claims is 19 March 2020), you must work out a pro-rata rate for their earnings so far, and then claim for 80% of this.

No fees can be charged from the money you claim. You must not pay the employee less than you claim for, or pay them in anything other than the form of money.

The government says: “HMRC will retain the right to retrospectively audit all aspects of your claim.” Remember that HMRC has access to your PAYE records and tax returns for you and your employees.

Agency staff can be furloughed if they’re on your payroll. If they’re employed by an umbrella company and on their payroll, the umbrella company can furlough them.

Speak to both the worker and the agency to find the best arrangement for your business and the individual concerned.

The same applies to Limb workers, who are also known as dependent contractors – if they are on your payroll then you can furlough them and then claim.

If they are self-employed and you wish to furlough them then they should seek assistance for themselves through the COVID-19 Self-Employed Income Support Scheme (SEISS).

Those who can be furloughed include officeholders such as salaried company directors as set out in the Companies Act 2006, and salaried members of Limited Liability Partnerships (LLPs).

Contractors who are salaried through their own personal services company (PSC) and are a director of the PSC can furlough themselves. They can claim only for their salary and not for any dividends.

However, self-employed individuals who use Self Assessment for income tax should use the Self-Employment Income Support Scheme (SEISS).

Furloughing of salaried company directors must be a formal decision of the board of directors, and noted in the company records and communicated in writing to the director(s) concerned.

During the furlough period, company directors can carry on statutory obligations required of their role, but as with any furloughed employee, they cannot carry out work for the company that creates commercial revenue, provides services, or is carried out on the behalf of the company.

Members of an LLP can be furloughed only if they’re designated as employees for tax purposes under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005.

Furloughing might require a formal decision by members of the LLP and potentially changing the LLP agreement. The reference salary to be used to calculate the claim must be the LLP’s profit allocation (excluding any personal/LLP performance additions).

Seek agreement with each employee and, once this has been achieved, write to them with the dates of the furlough period, and inform them what their salary will be during the period.

You may need to adjust their employment contract to take the furlough into account, along with the adjustment in salary.

If you switch the employee to the Flexible Furlough rules then, again, this must be agreed with them (including the hours to be resumed) and communicated to them in writing.

You must keep a record of your communications to employees with regard to furloughing for five years.

This is possible, especially if you intend to switch the employee to flexible furlough part time working. It will depend on existing provisions within the employment contract. You should consult an employment or contract law specialist if in any doubts.

Remember that whatever adjustments you make to the contract continue to be subject to equality and discrimination laws.

No, you aren’t limited to paying just 80% of earnings up to the monthly caps for each CJRS claim. The limit is the amount you can claim as a grant, but you can pay your employers more.

You could continue paying the full salary, or up to 100% of it, if you contribute the shortfall.

It runs from 1 March 2020 and has been extended to the end of October 2020, following an announcement by the chancellor (it initially was planned to end on 31 May 2020 but was then extended to 30 June 2020).

If you furlough an employee then they are not allowed to undertake work for, or on behalf, of your organisation. This remains true for the hours the employee isn’t working for you as part of the Flexible Furlough scheme.

This limitation must be communicated to the employee when they are furloughed. You or they must not try to get around this by reassigning different types of work tasks to them during their furlough, for example, or assigning them a different role (or in a different office).

The government says the ban on working for your organisation during furloughing includes “providing services or generating revenue”.

However, if their employment contract allows it, the employee is free to undertake paid work for other employers or individuals at their discretion – either existing employment they were already undertaking alongside their employment with you, or new work.

It’s possible some individuals may end up being furloughed by more than one employer.

Again, if you don’t wish them to do take on new work with another employer, that should be communicated to the employee. However, you might want to consult an employment or contract law expert with regard to enforcing such a measure.

Your employees can take part in training while furloughed, or volunteer work – although the work or training can’t provide services to your organisation, or generate revenue, or be on behalf of your organisation.

Employees continue to have the same rights at work during the furlough. They can still claim Statutory Sick Pay (SSP), maternity leave and other parental rights.

You must pay statutory pay as usual (with the exception of the first two weeks of SSP, for which the rules are different for those affected by coronavirus).

Should the employee be claiming a statutory payment then you can’t claim for them under the scheme.

The exception is if there is enhanced earnings-related contractual pay for maternity, adoption, paternity or shared parental pay. You can claim this through the Coronavirus Job Retention Scheme.

Once the individual is back at work following their statutory leave period then you can then furlough them and claim for them under the scheme as with any other employee.

Note: While employees who haven’t been furloughed before 30 June 2020 can’t be furloughed following this, employees returning from statutory paternity leave are exempt from this requirement.

In other words, if an employee returns from maternity leave after 30 June 2020 then they can be furloughed – even if they haven’t been before.

This will depend on the employment contract you have with the employee. Many employees are likely to continue to accrue leave as they would ordinarily.

However, if the contract says leave is accrued per hours worked then, in this instance, the employee might not accrue leave.

Employees who take leave must be paid according to their contract, which may mean you need to pay them 100% of their normal salary, not just the 80% of reference earnings. For this reason, some employees may want to take their leave while furloughed.

You should be careful an employee doesn’t take leave such that it reduces the three-week minimum length of a furlough period. That will mean you are unable to claim their salary for that period.

Furloughing may leave the individual with a surplus of leave as the end of the year approaches, so your communications with them should include reminders to book their leave for periods following the end of the coronavirus disruption.

No. The intention of the scheme is quite the opposite – it intends to keep employees paid during the disruption.

It’s possible under the scheme to re-employ somebody you previously made redundant in order to furlough them and pay them a salary.

Yes, charities can. And public authorities can make use of the scheme too.

However, the government does not expect it to be used by many public sector organisations because they will continue to provide essential services or contribute to the coronavirus response.

No. Under employment law, employers must allow time off to help someone who depends on them in an unexpected event or emergency.

The government has confirmed that situations related to coronavirus would qualify, but there is no legal obligation for employers to pay employees for this time, or furlough them.

Employees who are shielding in line with public health guidance (or need to stay at home with somebody who is doing this) can also be furloughed if they can’t work from home and you would otherwise have to make them redundant.

The government says: “Shielding is a measure to protect extremely vulnerable people by minimising interaction between those who are extremely vulnerable and others.”

Existing employment laws must be observed, and the Coronavirus Job Retention Scheme does not override these. But it also demands no further commitments from businesses.

The money is supplied as a grant, so does not need to be repaid – however, the funds must be returned if they are not used in line with the purpose of the scheme. There is no need to maintain employment after the payments have ceased.

Existing redundancy laws apply should you find yourself needing to take such measures following the end of the scheme.

For example, if 20 or more employees are being made redundant at the same time then collective redundancy rules apply. You will need to carry out a consultation of a minimum length with a representative for the workers.

Additionally, you will need to provide a contractual or statutory notice period.

Following your application for the scheme, you must retain the documentation for a period of six years.

You must keep the following for each claim:

  • The claim reference number you’re given.
  • Any calculations you used to work out how much the claim should be, such as spreadsheet files or even calculations that you’ve written down.
  • For each employee, the amount claimed.
  • For flexibly furloughed employees, the hours worked and the hours usually worked.
  • A copy of all records, including the amount claimed under the scheme, and the claim period for each employee.

In British English, it’s typically pronounced fur-low. The verb/adjective form of ‘furloughed’ is therefore usually pronounced fur-lowed.

Coronavirus and your business

We’ve gathered information and resources to help navigate this situation, including tools and webinars, to help you understand what financial support is available.

Find out more

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Comments (30)

  • Further to the info on claiming back NI contributions, why does the Sage module show a lower amount to claim back on employer NI than the actual figure on each employees pay record…. ?

    • Hi Kelly,

      We’ve put together some handy videos to explain the calculations our Job Retention Scheme Module in Sage 50 cloud Payroll makes, including a video specifically on Employer’s pension and NI calculations. You can watch these at http://ow.ly/gc7V50AMpq8

      You can also refer to this guide http://ow.ly/Ypmp50AMpq7 to find out why there may be differences between the Job Retention Scheme Module and HMRC.

      Regards,

      Paul
      Sage UKI

  • I have been told that if my employer claims the small employer allowance I cannot claim the NI back when claiming for a furloughed employee
    Is this correct?

    Thanks

  • I have 5 employees on furlough ending this Friday one of which ended furlough at the end of last week. My last claim was on the week ending 30/5. Do I send a separate claim in for the that 1 employee covering her for the weeks up to that point or can I differentiate her timescale when I claim at the end of this week?

  • We have clients whose staff are on SSP , are we allowed to claim this back through current scheme even though we have 4000 employers allowance ? How do we claim this back please

  • As I understand things, the scheme is changing from 1st July 2020.
    We wanted to furlough some more employees from 1st July but according to Government Guidelines we are unable to obtain the CJRS Grant unless employees were already furloughed between 1st March and 30th June 2020.

  • A furloughed member of staff would like to come back part time and the balance of hours paid via JRS what letter should I be ending them?
    Thank you

    • Hi Sandra,

      We’re working on a return to work letter for you to send to your furloughed employees from Sage 50cloud Payroll software.

      In the meantime, you can edit the existing Furlough letter in the Sage 50cloud Payroll Job Retention Scheme Module and send this to your employee/s to advise that they’re able to return to work.

      You can find full info on how to do this here http://ow.ly/ZGaQ50Aftg9

      Regards,

      Paul
      Sage UKI

  • Hi
    Could you confirm if an employee works part of the month prior to July 1st should their wage be calculated over calendar days as per the furlough calculation or over work days as per the normal calculation?

    Thanks

    • Hi Cherise,

      In this situation you’d need to calculate the daily rate of the employee’s wages, then pay each day they worked using this daily rate. You can then use the Job Retention Scheme Module in Sage 50cloud Payroll to calculate the furloughed amount.

      You can find full info on how to do this here http://ow.ly/Jlho50AfuDZ

      Regards,

      Paul
      Sage UKI

  • All very helpful thankyou but will the Sage system be amended monthly to adapt to these changes?

    • Hi Karen,

      The Government has announced that the Coronavirus Job Retention Scheme (CJRS) will change over the coming months, with further guidance announced by HMRC on flexible furloughing and how employers should calculate claims published before Friday 12 June. We’ll continue to update our software in relation to these changes.

      You can find more info on these changes here http://ow.ly/QBvs50AfxjL

      Regards,

      Paul
      Sage UKI

  • The claims for my furloughed employees were based on their salary the month before lockdown. Several employees were on minimum wage, however this increased in April. From next month I will be bringing some of them back part time, but their wage will have increased to reflect the changes to the minimum wage. For the July claim do I use the figure used before or the new wage figure as their salary for the calculations?

  • Hi
    If we bring back a staff member next week, can I then put in on part time furlough from 1st July or does he need to be on furlough on the 1st July to be able to claim the part time furlough?