The Coronavirus Job Retention Scheme (CJRS) has been live for over a week now and many employers have already applied for the grant. Within the first day, 140,000 companies employing a total of about a million workers had applied to the government’s job furloughed scheme, this was announced by the chancellor.
What is furlough leave?
‘Furlough’ means temporary leave of absence from work. This can be due to matters affecting the whole country or economic conditions affecting one company. The government has temporarily introduced furlough leave to give employers the option to keep employees on the payroll without having them working.
Any employee on furlough leave must be furloughed for a minimum period of three consecutive weeks.
Do I qualify for the CJRS?
Any employer is eligible for the scheme, including:
- Recruitment Agencies
- Public Authorities
To be able to claim the CJRS you must have:
- Created and started a PAYE payroll scheme on or before 19 March 2020
- Enrolled for PAYE online
- A UK bank account
Employers should discuss with their staff about furloughing them before they do so, as this is a change in contract agreement. To qualify for the CJRS, employers must confirm in writing to their employees confirming that they have been furloughed.
Do my employees qualify for furloughed pay?
Employees on any type of contact (full-time, part-time, zero-hours, etc) can be furloughed. To be eligible for the grant, the furloughed employee must not undertake work for the employer, or any associated organisation.
You can only claim for the furloughed employees who were employed on 19 March 2020 and were on the payroll on or before 19 March 2020. An RTI submission to HMRC must have been made on or before 19 March 2020 to notify HMRC of the employees on the payroll. If you had an employee that started before 19 March 2020 but the RTI was not until or after 20 March 2020, then they do not qualify for furloughed pay.
Employees who were made redundant or stopped working for an employer
If your employee was made redundant or stopped working for you after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages from the date you furloughed them, even if you do not employ them until after 19 March 2020. You can do this if they were working for you up until and 28 February 2020 and the RTI must have been filed before that date.
The same policy applies to those who were made redundant or stopped working for you on or after 19 March 2020. As long as your employee was on the payroll on or before 19 March 2020 and the RTI submission had also been filed on or before that date, then you can re-employ them and reclaim furloughed pay.
Other qualifying employees
As well as those who are not able to work due to their workplace not operating, the following can also be furloughed:
- Shielding Employees – Those unable to work as the are shielding in line with public health guidance
- Employees with caring responsibilities – Those who have caring responsibilities due to COVID-19 i.e. those who need to look after children
- Office Holders
- Company Directors – As long as they are only carrying out the duties set out in the Companies Act 2006, no more than what would reasonably be judged necessary
- Salaried Members of Limited Liability Partnerships
- Agency Workers – As long as they are paid through PAYE
- Limb (b) Workers – As long as they are paid through payroll
- Apprentices – Can continue to train but must be paid for the hours they spend training, which are not covered by furloughed pay
- Employees with more than one job – These employees can be furloughed from both jobs
- Employees on unpaid leave – Can only be furloughed from the day that they were due to come back to work. The employer cannot reclaim furloughed pay for the time the employee was on unpaid leave
- Employees on a fixed term contract – If their contract expired after 28 Feb 2020 and the RTI submission was sent on or before 28 Feb 2020, or their contract expired after 19 March 2020 and the RTI submission was sent on or before 19 March 2020.
Employees on reduced hours, or reduced pay, do not qualify for this scheme.
Sickness during furloughed pay
If your employee is on sick leave or self-isolating due to COVID-19, they are eligible for Statutory Sick Pay. If whilst your employee is off sick you decide to furlough them, you can do so, and still claim back the furloughed pay, however they must only be furloughed due to business reasons, you cannot furlough an employee solely on the fact that they are ill.
On the other hand, if your furloughed employee become sick, they are still entitled to their right to SSP. It is up to the employer whether they keep the employee on furloughed pay or to move them over to SSP.
Employers can claim both SSP and furloughed pay for employees, but not for the same period.
Unpaid work or training
If you employee does volunteer work or undertakes training, they can continue to do this, as long as they are not providing a service or generating revenue for the organisation. When the employer requests that the furloughed employees undertake training, the employees are entitled to be paid their appropriate minimum wage for this time.
For further information, please see HMRC’s website here. If you have any other questions, please do not hesitate to get in contact with us on 01273 771122 and we will do our best to help you.