Corona Virus Job Retention Grant Scheme – Furlough Leave – Update

Corona Virus Job Retention Grant Scheme – Furlough Leave – Update

27th March 2020

 

  • The Government aims to get the scheme up and running before the end of April.
  • The 80% Grant is based on the higher of (i) the earnings in the same pay period in the previous year; or (ii) the average earnings in the previous 12 months (or less, if they’ve worked for less)
  • Employees who have been recruited after 1 March 2020 are excluded from the scheme.
  • Employers can re-employ people who have been made redundant since 1st March, and then furlough them.
  • To qualify for the payment, an employee must be furloughed for a minimum of THREE weeks.  They can then come off furlough.  This means that employers cannot rotate staff weekly between furlough and non-furlough.
  • There is nothing in the guidance which prohibits rotating furlough leave amongst employees, provided each employee is off for a period of at least three weeks
  • Employees on furlough leave can do volunteering or training, providing it does not generate any money for their employer.
  • The scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020
  • Any organisation with employees can apply, including charities, recruitment agencies and public authorities.
  • The government does not expect public sector employers to use it as long as central government continues funding wage costs in the normal way.
  • With agency Employees, the scheme is only available for agency employees who are not working. Agency Workers who are not Employees, and engaged on a zero hours Contract for Services are not entitled to the Grant, and would simply be laid off in accordance with their contract.
  • Employers can reclaim up to 80% of wage costs up to a cap of £2,500 per month, plus (not including) the associated employer NICs and minimum auto-enrolment pension contributions on that wage.  Fees, commissions and bonuses are NOT included.
  • Employers can choose to top up to 100%, but does not have to (subject to employment law and renegotiating any contractual entitlements)
  • If Employees’ pay varies from week to week the Employer can claim for the higher of (i) the same month’s earning from the previous year (eg earnings from March 2019); or (ii) average monthly earnings in the 2019-20 tax year
  • Individuals are only entitled to the minimum wage when they work.  So if they are furloughed and do not work, and 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working.  However, they are entitled to be paid NMW for any time spent training.
  • To be eligible, the Employee must have been on the payroll on 28 February 2020.  If they were hired later, they are not eligible.  Anybody who was on the payroll on 28 Feb and has since been made redundant can be rehired and put on the scheme.
  •  When agreeing changes in hours (and acceptance of 80% pay), assuming the contract does not already allow for that, normal employment law applies.  The employer must be careful not to discriminate in deciding who to offer furlough too.
  • Employees on sick pay or self-isolating cannot be furloughed, but can be furloughed afterwards.  Employees who are shielding can be placed on furlough.
  • Employees on maternity (or similar) leave can continue to draw SMP (or similar) payments.  The guidance does not prohibit women on maternity leave agreeing to return to work early and then being furloughed, or electing to change to shared parental leave and then being furloughed.
  • Employers can only claim once every three weeks, i.e they cannot get weekly reimbursement.  Claims can be backdated to 1 March 2020.
  • The government plans issue further guidance on the process of claiming the payment in April.

Please note the above is subject to change. If you have any questions please either call ourselves, or alternatively check the ACAS, NHS and / or Govt. website links below

Kind regards

Chris Moses LLM Chartered FCIPD

Posted Sunday, 3rd July 2022