Covid-19 Job Retention Scheme
The coronavirus job retention scheme is a temporary scheme that was set in place on 1 March 2020. It has been extended and varied on several occasions since, most recently on 30th September 2021.
This scheme is aimed at employers who cannot maintain their current workforce because their operations have been severely affected by Covid 19.
All employers are eligible to claim under the scheme, although it is primarily designed to help those whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy.
For more information on the latest updates to the scheme, please click here.
You may have some questions around this new scheme, so we have prepared a helpful Frequently Asked Questions (FAQ) guide below.
Who is eligible for the scheme?
All UK employers are eligible. They must have a UK bank account and have enrolled for PAYE online.
This includes but is not limited to:
- businesses;
- charities;
- recruitment agencies;
- overseas organisations;
- public authorities.
Which employees can be furloughed?
Both full-time and part-time employees can be included in the scheme, as long as they are paid via PAYE and were on the payroll prior to or on 30 October 2020. Additionally, employees on flexible, agency or zero-hour contracts are included.
You are able to apply for the Furlough Scheme, even if you haven’t used the scheme before, however an employee must have been on the payroll from 2 March 2021 for periods starting on or after 1 May 2021.
What is a furloughed employee?
Furloughing is a new term for many employers, which has previously not been defined in employment law. For an employee to be ‘furloughed’, this means that they must not undertake any duties of their employment or linked to their employer. Employers will need to issue written confirmation to employees who have been furloughed and keep a record of this for five years.
It is stated in legislation that an employee is furloughed if:
- they have been instructed by their employer to stop working;
- they have stopped working for their employer for at least 3 weeks; and
- they were instructed to stop working because of circumstances arising as a result of coronavirus.
Who should I furlough?
The government guidance does not offer any advice on selecting staff to be furloughed, however, it does recommend you begin by speaking to your staff about this scheme. You are required to receive the employee’s agreement, as this will minimise the risk of being subject to discrimination claims. Additionally, as employment law applies to this process, you will need to update the individual’s working contract once all parties have come to an agreement.
We recommend that you create an objective selection procedure to aid your decision-making. This will ensure that you are fair and consistent in choosing who to furlough, thus reducing the risk of breaching discrimination law.
How much will I be eligible to claim?
Government guidelines state that employers can claim 80% of an employee’s ‘reference salary’ up to £2,500 a month. Additionally, employers can claim Employer National Insurance Contributions (NICs) and auto-enrolment pension contributions.
Where can I make a claim?
The Coronavirus Job Retention Scheme Portal opened on 20 April 2020, which you can access here.
When will I receive the grant?
Once HMRC has checked the claim, if you are eligible, you will be paid the reclaimed funds by BACS to the UK bank account details provided in the claim. Funds must then be paid to employees in the form of money. No administration fee can be charged.
Do I need to prove I cannot otherwise pay my employees?
The government has set out in its guidelines that proof is not required. An employer can furlough workers due to reason of circumstances arising as a result of coronavirus.
When will the scheme end?
Initially, the scheme was set to cover a four month, although this has now been extended until the end of September 2021.
Contact us
Healys Solicitors specialist Employment Team can help you with all aspects of employment law. If you have any other questions which were not addressed in this page, do not hesitate to contact our team. Please contact Healys LLP on 0800 2800432 or email us at enquiries@healys.old-website.shout-loud.co.uk.
