Coronavirus Job Retention Scheme

This page provides guidance on the Coronavirus Job Retention Scheme, commonly known as the furlough scheme.

The Coronavirus Job Retention Scheme (CJRS) was announced in March 2020 and launched for applications in April 2020.  From 1st July the scheme has been closed to new entrants so only employees furloughed before the 10th June are eligible for claims, however part time furlough was introduced so employees can return to work part time and claims can be made on the CJRS for normal hours not worked.

Since the 1st August the level of monthly has been progressively reduced as follows:

• March to July 2020 – 80% of wages, up to a cap of £2,500 per month, plus employer national insurance and pension contributions.
• August 2020 – 80% of wages, up to a cap of £2,500 per month, but no payment for employer national insurance or pension contributions.
• September 2020 – 70% of wages, up to a cap of £2,187.50 per month, no payment for employer national insurance or pension contributions, employers must top up employee pay to at least 80% up to a cap of £2,500.
• October 2020 – 60% of wages, up to a cap of £1,875 per month, no payment for employer national insurance or pension contributions, employers must top up employee pay to at least 80% up to a cap of £2,500.

This information is also set out here.

The scheme will close on 31 October 2020.

Current details of the Coronavirus Job Retention scheme can be found here.

The Coronavirus Job Retention Bonus was announced in July 2020. This will be a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. For more information click here.

Past information

The Department for Business, Energy & Industrial Strategy (BEIS)confirmed that the three‐week minimum period for furloughing an employee remained in place. Furloughed employees could not undertake any work for the company which includes providing services or generating revenue.

A useful guide outlining the furlough process from an employer’s point of view can be found here.

Key points about the scheme are:

• The scheme is intended to support employers to keep employees on the payroll who would otherwise need to be made redundant because there is no work for them.
• The scheme should not be used where there is work available, except for staff who are shielding under guidance from Public Health England.  For further information on shielding see here
• The scheme is not to be used for employees who are sick or self-isolating, see guidance on sick pay here.
• The earliest start date for a furlough is 1 March 2020.
• Employers should discuss the furlough with their staff and make any changes to the employment contract by agreement. See below for further details and for a sample letter which can be used. While the employee is on furlough employment continues with all other associated terms and conditions of service.
• Furloughed employees must go home and not work throughout the period of furlough.
• Employees can be furloughed and returned to work as many times as needed but the minimum period of furlough is 3 weeks.

 

Placing Employees on Furlough – Keeping a Record – Varying Terms of Service

The terms of the Coronavirus Job Retention Scheme include that to be eligible for subsidy an employer should write to every employee to be placed on furlough, confirming that they have been furloughed, and keep a record of the communication.

For most employees this change will be a variation to their terms of service, which due to the emergency circumstances and no other beneficial alternative, it is very likely that an employee would agree to. It will be prudent for employers to obtain a record of the an employee’s agreement.

When furlough ceases the employee’s terms of service will be varied again, perhaps returning to the pre furlough position, perhaps to something different, even to the start of a redundancy procedure. It will be helpful later if this uncertainty is understood by employees at the time of furlough.

An example letter to employees is available here.

This letter is generic and attempts to give a reasonable start point for a communication to employees which meets the above objectives. Users should adapt the draft letter to their particular circumstances.

The reference to not undertaking work for any other employer whilst on furlough is not strictly correct. However, within our industry sub sector a number of employees have undertaken regular additional work away from their primary employer, this reference is intended to bring any instances to light to their main employer to avoid problems at the time of notification/submission to HMRC when claims are made.

This information is intended only as ‘general’ information, it does not constitute advice for the purposes of any individual case and cannot be a substitute for specific professional advice based on the circumstances of any such case. The NASC/author cannot accept any liability for any loss or damage, however arising, to any person or organisation using this information/document.

If you have further queries please email enquiries@nasc.org.uk including your telephone number.