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Coronavirus Job Retention Scheme Covid-19
31 March 2020
You will have heard the Chancellor’s recent announcement regarding the Coronavirus Job Retention Scheme (CJRS), under which all employers can apply to HMRC for a grant to pay 80% of the wages of retained employees who are not working. This will not apply to businesses where employees are able to work from home.
You may be asking yourself;
- How do I know if it applies to my business and workforce?
- What should I do and how should we implement it?
- How much will it cost the business?
- How does it work with my employees in practice?
Here is what we know so far:
What is the Coronavirus Job Retention Scheme (CJRS)?
Effectively it is a grant (not a loan) to pay 80% of the wages of retained employees who are working.
What is “furloughing”?
Furloughed workers are those whose employees that have been asked to stop working but have not been made redundant where the employer cannot cover staff costs due to coronavirus. Such employers are now able to access support to continue paying part of their staff’s wages, to avoid redundancies.
How much can we claim?
It is a grant up to a maximum of £2,500 per worker per month. At this stage we believe that employees who are furloughed will not be permitted to do any work and the normal guidance applies in regard to the fair assessment of work available (if any), and the selection of employees available to carry it out
What are the current details of the scheme?
- The CJRS will cover wages backdated to 1st March 2020.
- It is currently set to remain in place until end May 2020 although this could be extended if necessary.
- It is likely that first payments will be made by the end of April 2020.
What is the qualifying criteria?
Part of the qualifying process will require businesses to:
- Designate affected employees as ‘furloughed workers’ and notify them of the change.*
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.
*It’s important to remember that changing the status of employees remains subject to existing employment law and, depending on the employment contract, union or workforce agreements in place, and may be subject to negotiation. Please contact our Head of HR Alexandra Marriott for further information.
How is HMRC managing this process and when will the HMRC portal be available for application?
HMRC are currently working on a system for reimbursement, as their existing systems are not set up to facilitate payments to employers. Clearly there will be a process that businesses will need to follow to minimise any long term impact of furloughing employees.
What about the normal HR rules and policies regarding lay-offs and contract terms?
A ‘lay-off’ is slightly different to a ‘furlough’. There is no upper limit for how long employees can be laid-off or put on short-time for. They may be able to claim redundancy pay however if they are laid-off without pay or put on short-time for either: four consecutive weeks or six weeks within a 13 week period. Furlough is for an indefinite period and the purpose is to avoid redundancies.
Take Care! The law has not changed with regard to legal obligations and HR policies.
Do we need to pay the employee 80% or 100% of their usual salary?
As you will receive 80% of the employee’s salary, you can choose to fund the difference between this payment and their usual salary but there is currently no legal obligation to do so.
To ensure you stay in touch with regular updates and advice on CJRS please contact Alexandra Marriott Fortus Head of HR and she can ensure your business has the latest information and discuss if the scheme would apply and how you can implement it into your business.
How Fortus can help
Our HR team are working around the clock to support businesses through this unprecedented and worrying time. We can provide either bespoke or ongoing support services in different forms such as our Emergency Planning Checklist or 3-month retainer Business Support Scheme amongst other options. Please speak to Alexandra Marriott for more details of how we can help your business.
We want to help and support businesses with clear and concise information at what is an extremely worrying time for us all.