Coronavirus Job Retention Scheme Guidelines

The Coronavirus Job Retention Scheme has been implemented to help protect jobs during the COVID-19 Pandemic. Below we have summarised the key points. We have also produced a detailed guide and FAQs on the 'furlough' scheme and its interaction with other issues such as shielding and statutory sick pay, which can be downloaded from this page.

We recommend checking back on this page regularly as the furlough scheme is an ever changing scheme with further updates anticipated soon.

    • Employers can claim up to 80% of wages costs up to £2,500 a month plus associated National Insurance and minimum Automatic 
    • Enrolment Pension Contributions
    • PAYE scheme must have been in operation by 19th March 2020
    • All UK businesses and organisations including charities, public authorities and recruitment agencies can claim
    • Employee must have employed and been on payroll by 19th March 2020 (i.e. an RTI submission must have been made by 19th March for the employee) and anyone starting employment after that date cannot be furloughed (there are exceptions in the case of TUPE of business succession)
    • If an employee left employment after 28th February 2020 they can be re-hired and furloughed
    • Employee must be furloughed for a minimum of 3 weeks at a time but can be furloughed more than once.
    • No partial furlough – would need to be normal short time working or lay-off if employee is working reduced hours
    • Normal discrimination laws apply to furlough decisions and process
    • Considered to be change to employment contract so should be by agreement. There needs to be written notification of furlough but no requirement for written agreement from employee
    • Do not need to furlough all employees but those on furlough cannot work
    • Employees on unpaid leave on 28th February cannot then be furloughed unless and until the unpaid leave was due to end, but if placed on unpaid leave after 28th February they can be
    • Employees on sick leave or self-isolating can be furloughed after the medical certificate or period of self-isolation ends
    • Employees shielding in line with public health guidance can be furloughed
    • Employees cannot work for business or do anything that would generate revenue for it but can take part it in employer organised volunteer work or take part in training.
    • If an employee is required to undertake training, then must be paid NLW/NMW for the time spent but furlough pay counts towards this.
    • Holidays can be taken during furlough but furlough pay must be topped up to 100% on holiday days
    • Employer must pay the employee the lower of 80% of normal wage of £2,500 per month
    • Employer can but not obliged to top up salary
    • Salary is basis of calculation for salaried employees and no fees, commission or bonus to be included
    • For variable pay including zero hour/agency staff the employer can claim on the basis of the higher of:
      1. the same month’s earning from the previous year
      2. average monthly earnings from the 2019-20 tax year
    • Employees employed less than a year – use average monthly earnings
    • Employee’s employed in February 2020 – pro-rata earnings to date
    • Normal PAYE and pension deductions to be applied.
    • If salary topped up cannot claim grant for employer costs (Employer NI and pension contributions) on the topped-up element
    • NLW/NMW does not apply as not working unless employees required to undertake training
    • Collective consultation rules may be necessary for contract changes
    • HMRC has right to retrospectively audit all aspects of the claim
    • Can claim once every pay period
    • Grants will be paid by BACS to a UK bank account
    • Claims should be made at time or in advance of payroll based on amounts actually paid
    • No fees can be charged to employee and they must receive full amount for their gross pay
    • When scheme ends employer can choose to look at termination of employment
    • Normal deductions to be applied to pay, i.e. income tax, employee NI and pension contributions
    • Grant is classed as income for Income Tax and Corporation Tax and amount paid to employee is an employment cost


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