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HMRC guidance on the Coronavirus Job Retention Scheme (“CJRS”).
The scheme will pay a grant of 80% of the employee’s salary up to £2,500, together with the employer's national insurance and minimum automatic enrolment employer pension contributions on that salary.
Employees’ salary will still be subject to income tax and national insurance.
NMW/NLW does not apply to furloughed employees (see exception below - training).
Fees, commission and bonuses are not included.
For employees on flexible contracts:
If they have been employed for longer than 12 months, it is the higher of the average monthly earnings for 2019/20, or their earnings from the same month the previous year.
If they have been employed for less than 12 months, it is the average of their monthly earnings since they started.
There are detailed calculations for those furloughed whilst on maternity leave, paternity leave, shared parental leave, and adoption leave.
Furlough grants are per employment so if your employment contracts allow individuals to have other employment then they may be furloughed by one, some or all employers and each employer make its own furlough payment claim
Furloughed employees must have been on the payroll on 28 February 2020. Employees hired after this date cannot be furloughed or claimed for.
Employees the scheme can be claimed for includes full time, part-time, employees on agency contracts and employees on flexible and zero-hours contracts.
The scheme covers employees made redundant since 28 February 2020 if they are rehired by the employer.
Employees on unpaid leave which began prior to 28 February 2020 cannot be claimed for.
Employees on statutory sick pay (sick or self-isolating) can only be furloughed after this.
Employees on maternity leave, paternity leave, shared parental leave, and adoption leave can be furloughed, some detailed rules apply.
Claims for grants can be made every 3 weeks and can be made in advance of an imminent payroll.
The minimum furlough period is 3 weeks but employees can be re-furloughed if required whilst the scheme is open.
Employees on furlough cannot undertake any work or provide services or make money for the employer. Reduced hours and reduced pay are not eligible.
Employees can volunteer whilst furloughed.
Employees can undertake training whilst furloughed, but if it is ‘required’ training they must be paid NMW/NLW for this time, even if the 80% grant does not cover this. There is no detail as to what constitutes required training at this point.
Furloughing and any changes to the employment contract must be done by agreement with staff. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
Employers should write to employees to confirm their furlough status and keep records.
Employees that have been furloughed have the same rights as they did previously. That includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments. Employees can be made redundant during the period of furlough or at the end of a furlough period if the business so requires.
We will update this page as we know more.