On Saturday 4 April 2020, Government published updated guidance on the Job Retention Scheme (JRS) “Claim for your employees’ wages through the Coronavirus Job Retention Scheme”, to clarify many key areas that had not previously been considered or fully explained.
- Employers must notify employees of their furlough status in writing and keep the record of that written notification for five years.
- Employees who have been furloughed in their current job can start a new job (subject to their contractual terms with their original employer), allowing them to claim 80% of their wages and a further 100% in a new job. Individuals will not be eligible to be furloughed in their second job if they were not on the PAYE payroll on or before 28 February 2020.
- If an employer made an individual redundant, or they stopped working for the employer on or after 28 February 2020, they can be re-employed, put through on furlough and the employer can claim for their wages through the scheme.
- Employers will not be able to claim for employees while they’re getting SSP, but they can be furloughed and claimed for once they are no longer receiving SSP.
- Employees who are unable to work because they have caring responsibilities resulting from COVID-19, such as childcare, can be furloughed.
- Providing an agency worker is being paid through PAYE they can join the JRS, including where they are employed by umbrella companies. Note This should be agreed between the agency, as the deemed employer, or the umbrella company and the worker. It would be good practice to ensure the necessity to furlough workers is communicated with the end client in the supply chain.
- Limb (b) workers, i.e. those who have worker rather than employee status, who are paid via PAYE can be furloughed and access the JRS.
- Employers can claim for any regular payments such as wages, overtime, fees (although this is not defined) and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.
- The reference salary for the application should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind.
- Employees can be furloughed multiple times meaning that they can be furloughed, brought back to work and then re-furloughed (subject to each furlough period being at least three consecutive weeks).
See the full updated guidance here.
It is essential that employers are aware of their obligation to notify employees of their furlough status in writing and keep the record of that written notification for five years. This requirement was not detailed in previous guidance.
When the government ends the scheme, employers will need to consider whether an employee can return to their duties or whether it may be necessary to consider termination of employment.
If you require any further advice or guidance about how to manage the furlough process or any other employment guidance, such redundancy, do get in touch on 0121 445 6178.