Coronavirus Job Retention Scheme
01 April 2020
Advice has been issued from the Government about the Coronavirus Job Retention Scheme.
The Coronavirus Job Retention Scheme (CJRS), is a complex support package and full details have not been clarified yet by the Government.
What is it and who is covered?
Essentially CJRS will be a government grant. The idea is to reimburse employers for 80% of a “furloughed worker’s” wages or salary, to a cap of £2,500 per month. Our understanding is that employers may choose to top up the remainder, but they are not required to do so.
The maximum grant is £2,500 plus the associated employment costs of employer’s national insurance and employer pension contributions. Full time, part time, employees on agency contracts and employees on flexible or zero hours contract are eligible.
What is not covered?
Fees, Commission and bonuses are NOT included.
Only employees who were engaged in work with you before the 28th February can be furloughed. If they joined your company after that date, they are not eligible to be furloughed.
What information do I need to make a claim?
- The PAYE reference
- The number of employees being furloughed
- The claim period
- The amount claimed (minimum furlough length s three weeks)
- Your bank account and sort code
- Your contact name
- Your phone number
Is the overall pot limited?
There appears to be no limit on the amount of funding available for the scheme. According to the Chancellor “We will pay grants to support as many jobs as necessary.” Grants will be back dated to 1 March and open initially for 3 months.
Who is eligible for the scheme?
All UK businesses are eligible: small or large, charitable or non-profit will be eligible for the scheme. You can furlough staff for a minimum of three weeks. You must operate a UK PAYE scheme and have a UK Bank account.
Is it a loan?
No. It states that this is a grant to employers so although there is no guidance yet on this point, we presume you will need to pay the worker and process PAYE, NICs and employers costs as normal and then there will be a reimbursement up to the maximum amount. You can only furlough for a minimum of three weeks at a time and you can only submit one claim every three weeks. Claims will be backdated to 1st March.
What is a furloughed worker?
Furloughed workers are “workforce who remain on the payroll but are temporarily not working during the coronavirus outbreak”. Employers will need to notify employees of this change in their employment status so it will need to be handled carefully by HR specialists. We expect employers may be asked to justify the “furloughed” assessment, the most obvious examples being employees who would ordinarily have extensive contact with the public or those for whom work has dropped off due to lack of orders. You do not have to place all your workers on furlough, if there is work still to do, then you can continue to employ them and pay their wages and furlough those for whom there is not enough work or work has dropped off.
There is more information via the Government Official Pages.
