Coronavirus job retention scheme

Given the ongoing spread of the Coronavirus, we are providing generic guidance for members.See below for more information on the government’s job retention scheme.

We are updating this regularly in line with government advice and guidance.

Last updated 12/05/2020.

Background

On Friday 20th March 2020, the Government introduced a new scheme that aims to keep people employed through the Coronavirus outbreak.

The government announced that the Coronavirus Job Retention Scheme has extended until the end of October. Employers can apply for the scheme here and a step by step guide is available here.

What does the scheme do and how does it work?

The scheme enables employers to claim 80% of staff costs if they cannot cover them themselves due to the Coronavirus. These staff costs include; monthly wages and the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions.

In order for employers to be able to access the scheme you must be officially furloughed, which means the following requirements must be met:

• You are enrolled for PAYE
• You are told that you will be kept on your employer’s payroll
• You will not be undertaking any work for your employer, which means you cannot provide services for or generate revenue for your organisation.

Furthermore, you must have been enrolled for PAYE on or before 19 March 2020 and have a UK bank account.

Please note from August this scheme will have further flexibility with regards to furloughed workers undertaking work for their employer.

This furlough process allows your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month. If your employer is participating in the scheme, they are able to backdate your wages to 1st March.

During furlough you remain employed. Your wage will also remain subject to the usual income tax and other deductions.

Your employer can choose to fund the remaining 20% of your salary but they are not required to under the scheme. If your salary is reduced as a result of this, it may mean you are eligible for additional support through the welfare system such as Universal Credit. Apply here.

Furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020 are only entitled to this scheme.

What do I need to do?

Nothing – it is your employer’s responsibility to contact HMRC through the online portal.

It is your employers responsibility to discuss any changes to your contract with you, and these changes must be made by agreement.

If you have already been laid off, your employer is able rehire you and ensure you receive 80% of your wages backdated to 1st March under the scheme. If you have been laid off, please contact your employer immediately to see if they are looking to access the scheme so you can receive at least 80% of your wages.

Do I have a choice in whether I am furloughed?

Yes, your employer must discuss with you any changes to your employment contract. If your employer wants to make changes to your contract these must be made with agreement from you. It is your right to reject changes to your employment contract. If you are concerned about any changes, or how to engage in the consultation process with your employer, please contact your union rep or the Service Centre 0800 389 6332.

Can my employer rotate my furlough status?

There is a three week minimum that an employee can be furloughed, which implies that workers can be rotated. We are seeking clarity on exactly how this enables employers to rotate workers.

Can my employer use the scheme as a form of short-time working?

The minimum furlough period of three weeks means that workplaces can, if they are able to, run a job rotation scheme as a form of short time working, provided each worker is furloughed for that three week minimum.

From August, the government have indicated they will allow for greater flexibility to support the transition back to work. Employers currently using the scheme will be able to bring furloughed employees back part-time.

How will my pay be calculated?

If you are full time or part time, the Government will pay 80% of your salary before tax as of 19 March 2020. The scheme will not include fees, commission and bonuses.

What if I am on a zero hours or low hours contract?

If you are on a zero hours contract; you meet the definition of ‘employee’ and you are earning more than an average of £118 per week under that contract (known as the Lower Earnings Limit), then you will be on the PAYE system.

The scheme covers everybody who was on the PAYE system through a company on or before 19th March 2020. This means you are eligible for the scheme.

If your pay varies and you’ve been employed (or engaged by an employment business in the case of agency workers) for a full year, employers will claim for the higher of either:

  • the amount you earned in the same month last year
  • an average of your monthly earnings from the last year

If your pay varies and you’ve been employed for less than a year, employers will claim for an average of your regular monthly wages since you started work.

If you have been working for less than a month, your employer will pro-rata your earnings from that month.

Can I earn less than the National Living/National Minimum Wage through the scheme?

You are only entitled to the National Living/National Minimum Wage if you are working. Therefore, when you are furloughed you will be paid 80% of your salary even if based on your usual working hours this means you would be earning less than the National Living/Minimum Wage.

What if I am self-employed?

If you are self-employed you do not qualify for the scheme. However, on 26th March the government announced a comprehensive package for the self-employed. You can find out more about that package here.

It’s important that you notify the Department for Work and Pensions of the change in your circumstances, and tell them that it is due to the impact of the Coronavirus. As long as you meet the relevant eligibility criteria you will be able to access Universal Credit. Apply here.

What if I am on reduced hours or working for reduced pay?

For now, this scheme is only accessible for those not working for their organisation who are furloughed. From August, the scheme will have greater flexibility to support the transition back to work. Employers currently using the scheme will be able to bring furloughed employees back part-time. We are working closely with government on what that scheme will look like.

What if I am sick?

If you are on sick leave or self-isolating you can receive Statutory Sick Pay, you can read more about that here. If your employer wants to furlough you for business reasons and you are off sick, they can do so. In these cases, you should no longer receive sick pay and would be classified as a furloughed employee.

What if I have caring responsibilities?

If you are unable to work because you have caring responsibilities resulting from Covid-19, you can be furloughed. This includes if you need to look after children who can no longer attend school.

What if I am shielding?

If you are shielding in line with public health guidance you can be placed on furlough. If you need to stay at home with someone who is shielding in line with public health guidance you can also be furloughed.

No longer should any employer claim “uncertainty” or “lack of detail” for failing to take steps to protect employees’ jobs and the health of those workers and those close to them.

What if I have more than one job?

If you have more than one eligible employer, you can be furloughed by each of them and the £2,500 cap applies for each employer individually.

Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

What if I am on a fixed term contract?

Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term employee’s contract ends because it is not extended or renewed the grant will no longer be able to be claimed.

What if I am an agency worker?

Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.

Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.

Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

What if I am a ‘limb (b) worker’ (not an employee)?

Where Limb (b) Workers are paid through PAYE, they can be furloughed and receive support through this scheme.

Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme (SEISS).

What if I am an apprentice?

Apprentices are eligible for the scheme. As an apprentice, when you are furloughed you can continue to train for your apprenticeship as long as this does not provide services to or generate revenue for your employer. If you are required to complete training while you are furloughed, you must be paid at least the National Living/Minimum Wage for the time spent training, even if this means you will be paid more than the subsidy of 80% of your wages for that period. In addition to this, training and assessments have been encouraged to take place remotely, and extensions should be granted, where appropriate, to the timetable for assessments.

What if I am on Maternity Leave, adoption pay, paternity pay or shared parental leave?

If you are eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, then the normal rules apply and you are entitled to claim up to 39 weeks of statutory pay or allowance. Read more about SMP here.

If your organisation offers enhanced contractual pay to people on Maternity Leave, this is included in the wage costs and your employer will be able to claim this through the Job Retention Scheme. The same principles apply for contractual adoption pay, paternity pay and shared parental leave.

What if I am a union rep and have been furloughed?

Whilst on furlough, employees who are union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers. However in doing this, you must not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation.

What employment rights do I have while I am furloughed?

You have exactly the same rights as previously including; Statutory Sick Pay entitlement, maternity and parental rights, rights against unfair dismissal and redundancy payments.

Your employer can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for maternity pay, adoption pay, paternity pay, shared parental pay and parental bereavement pay.

See below for the full document or click here for a downloadable version.

 

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