COVID-19 Job retention scheme

The Job Retention Scheme enables employers who have no work for employees to receive financial support from the government to pay these employees while they are on leave or furloughed and not able to work.

The key features of the scheme are:

  • all UK employees are potentially eligible. Partners and self-employed persons are not eligible
  • there is a possibility that workers (the intermediate category between employee and self-employed) may be covered but the position is not clear.
  • in order to access the scheme, employers will need to designate affected employees as “furloughed workers” and notify these employees of this change. Furloughed workers will not be working but will receive some pay from their employers funded by the Government.
  • the government has said that “changing the status of employees remains subject to existing employment law and, depending upon the employment contract, may be subject to negotiation.” This means that the normal rules of employment law (statutory and case law) continue to apply, with the consequence that employees cannot be forced to take furloughed leave without their agreement. The alternative is of course redundancy.
  • 80% of “wage costs” will be reimbursed up to a cap of £2,500 per month (£30,000 per annum).
  • employers will be asked to submit information to HMRC about the employees who have been furloughed and their “earnings” through an online portal that will be launched shortly.
  • Reimbursement payments will be backdated to 1 March and the first payments are expected to be made by the end of April.
  • the scheme is expected to last for three months and may be extended.
  • there are no limits to the numbers of employees for whom employers may claim.

The key to this is speaking to your employees and getting their agreement.

If you have any questions on this or anything else to do with employees and COVID-19 please do not hesitate to get in touch.

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