The Scheme permits an employer to apply for re-imbursement of 80% of a furloughed employee’s salary up to a maximum of £2,500 per month, per employee. The Government has also said that it will pay all associated Employer National Insurance Contributions and the employer’s minimum automatic enrolment pension contributions.
Am I an eligible to apply?
All UK businesses, organisations and individuals who hire employees can apply for support under the Scheme providing they pay the employee through PAYE and the employee was on the payroll and the employer sent HMRC an RTI submission notifying a payment in respect of the employee on or before 19 March 2020.
This would cover businesses, public authorities, NGOs, charities, football clubs and any other body which has employees. However, the Government has made it clear that it does not expect many public sector employers to use the Scheme if they receive public funding for staff costs although the Scheme may be used if the organisation is not primarily funded by the Government, or if its staff cannot be relocated to assist with the coronavirus response.
If a company is in administration, the administrator can apply for support under the Scheme. However in the first case to consider the CJRS Carluccio’s Limited (in administration)  the High Court ruled that administrators who apply for funding under the Scheme can apply the funds to pay wages in priority to paying all other costs and expenses of the administration.
Please click here for more information on the step-by-step guide for employers.
How can I apply to the Scheme?
To apply for funding the employer must designate an affected employee as a “furloughed worker” and notify the employee of this change of status in writing. If the employee’s contract of employment does not allow this change, the employer will need to get the employee’s consent to the change in writing before making a claim under the Scheme. We advise that you obtain the employee’s consent in writing before making a claim.
Even if the employee agrees to the change in status the employer is still subject to all of its usual contractual and statutory obligations towards its employees.
If you are finding it difficult to get express written agreement from your employee please seek legal advice. On the basis of the information currently available it appears that it is mandatory to obtain the employee’s express written agreement to being furloughed. Failure to obtain the employee’s written agreement may jeopardise a claim under the Scheme.
The online portal for applications to the Scheme opened on Monday 20 April 2020. Please click here for more information.
Individuals covered by the Scheme.
The Guidance (as amended) provides that Individuals covered by the Scheme must have been on the employer’s PAYE payroll on or before 19 March 2020 and the employer must have notified HMRC that the employee was on the payroll by an RTI submission on or before 19 March 2020.This means that an RTI submission notifying payment in relation to that employee to HMRC must have been made on or before 19 March 2020.
The employee can be on any type of contract eg part-time, full-time, agency contracts, zero and flexible contracts.
Office holders (including directors), agency workers, (including those employed by umbrella companies) salaried members of a Limited Liability Partnership (LLP), foreign nationals those on all visa categories with rights to work in the UK and non-employees such as “workers” under the Employment Rights Act 1996 (“ERA”) can be furloughed. A worker is defined in the ERA as an individual that works under:
“(b) any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”.
Calculation of wages through the CJRS
Find out how to calculate 80% of your employee’s wages, National Insurance Contributions and pension contributions if you've furloughed staff due to coronavirus (COVID-19) by clicking here.
Duration of the Scheme
The Scheme will run until the end of June 2020 and will cover the salary costs set out above backdated to the 1st March 2020. Employers can apply to the Scheme during this period. The Government has said that if necessary, the Scheme will be extended.
Guidance for Employees
The Government has also produced a Guidance on the Scheme for employees. Please click here for more information.
We are taking calls daily from clients in these uncertain times.
If you need advice on the Coronavirus Job Retention Scheme and how you can benefit from it as Employer, call our Coronavirus Helpline on 01234 938089 or e-mail us at firstname.lastname@example.org and one of our Helpline team member will be in touch.
We are specialist Employment Solicitors based in Bedford and operate nationally.