Coronavirus Job Retention Scheme

by Rob Stokes

Published on 25th March 2020

Following the Chancellors announcement on 20 March 2020 in respect of the Coronavirus Job Retention Scheme further details have been released.

Who can access the scheme?
All UK businesses are eligible to use the scheme, regardless of size.

How is it intended that the scheme operate?
The employer will designate affected employees as furloughed workers. The employer will then submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal – which is being built now. As yet we don’t know the full extent of the information that will be needed at the moment. HMRC will then provide the employer a grant to reimburse 80% of those workers who have been furloughed, up to a cap of £2500 per month per worker.

Will these grants need to be paid back?
No, they are a grant and not a loan.

Can the employer top up the employees’ wages from 80% to their normal contractual amount?
It appears that yes there is no restriction here. The scheme has been set up with no obligation on the employer to make up the remaining 20% of wages, but they may choose to do so.

When will the scheme start?
The system and portal are being built now and the aim is to pay the first grants before the end of April. It will be backdated to 1 March if required for early lay offs. The intention is to run the scheme for 3 months, but this may be extended if required as circumstances change.

Is there an internal HR process the employer needs to follow?
It appears that the employee needs to agree to the furlough, especially if their employment contract does not give the employer the right to lay them off. They remain an employee and their contracted benefits (holidays etc.) remain the same.

What if the employer has already laid people off?
There is no current guidance as to what provisions will be made for these instances. Once there is information on this, an update will be issued.

What if the employer has work for the employees for part of the week?
As it stands the guidance suggests part time working will not be allowed, but official clarification is being sought on partial furlough and also on taking people on and off furlough to match demand.

Can an employee ask the employer to be furloughed?
Yes, but the final decision to offer a furlough rests with the employer.

If an employee is instructed to isolate or self-isolating, do they get to participate in the furlough arrangements?
No. In this circumstance they would receive SSP for 7 or 14 days as required. On their return to work the furlough process would then be considered.

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