Support Centre
Job Retention Scheme
It's important to remember that there are options for you as a business at this time.
Please note: The Coronavirus Job Retention Scheme will close to new entrants on June 30, 2020. The final date by which an employer can furlough an employee for the first time will be June 10, in order for the current three-week minimum furlough period to be completed by June 30.
For the most up-to-date information for employers on the Job Retention Scheme, see here.
FAQs about the Job Retention Scheme - for a downloadable copy, click here.
The JRS is a temporary scheme open for at least 8 months from 1 March 2020 which is designed to support employers severely affected by COVID 19.
Please note: The Coronavirus Job Retention Scheme will close to new entrants on June 30, 2020. The final date by which an employer can furlough an employee for the first time will be June 10, in order for the current three-week minimum furlough period to be completed by June 30.
Any UK employer, irrespective of size or sector. An employer must have a UK bank account and have started a PAYE payroll scheme on, or before, 28 March 2020.
Where a company is in administration, the administrator will be able to access the JRS.
Where an employer receives public funding for staff costs, or to provide services necessary to the response to COVID-19, the employer is not expected to apply for funding under the JRS.
Furloughed status is not a concept that is recognised in existing employment legislation. Current Government Guidance states that an employee is “on furlough” if they remain on the payroll but are not carrying out work for the employer because of COVID 19.
Employees must have been on an employer’s PAYE payroll and notified to HMRC on an RTI submission on 19 March 2020 (this was extended on 15 April from 28 February 2020.) The Scheme covers:
Employees hired after 19 March are not eligible to be furloughed in accordance with the JRS other than in certain limited exceptions where there has been a TUPE transfer or a payroll consolidation after 28 February 2020.
Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended before their natural conclusion during the furlough period without breaking the terms of the scheme. There is no minimum period which must be left to run on a fixed term contract to enable it to be renewed or extended. If the fixed term contract ended after 28 February 2020 then the RTI submission must have been notified to HMRC on or before 28 February 2020 to be covered. If the fixed term contract ended after 19 March 2020 then the RTI submission must have been notified to HMRC on or before 19 March 2020 to be covered. Employees that started and ended the same contract between 28 February 2020 and 19 March 2020 will not qualify for the Scheme regardless of whether or not it was a fixed term contract.
In most cases it is no longer possible to furlough employees that have not previously been furloughed as the deadline of 10 June has now passed. There is an exception for parents coming back from statutory maternity, paternity, adoption or shared parental leave after 10 June. They are eligible to be furloughed provided their employer had already used the Scheme.
HMRC guidance states that to be eligible for the grant employers must confirm in writing (which can be by email) to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming the Scheme. There needs to be a written record, but the employee does not have to provide a written response. New guidance also states that collective agreement reached between the employer and the trade union is also acceptable for the purposes of a claim. A record of this communication must be kept for five years until 30 June 2025.
In the absence of a contractual right to lay off, it would be advisable to obtain consent from employees. The easiest way to do this is by email. To impose furlough status without consent is likely a breach of contract, particularly if the employee’s wage is being reduced as a result.
No, it is a decision for the employer. However, if an employer were to refuse to put an eligible employee on furlough and instead made them redundant arguably this would be an unfair dismissal as there was a clear alternative.
If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:
You do not need to place all your employees on furlough and you can continue to fully furlough employees if you wish. Employees cannot undertake any work for you during time that you record as them being on furlough.
Previously there was no limit to how many employees an employee could furlough. However, staring from 1 July, the number of employees you can claim for in any single claim period cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June.
For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.
The only exceptions to this are in respect of employees that are returning from family friendly leave such as maternity or parental leave or military reservists returning from a period of mobilisation that started before 10 June and ended after 10 June and are being furloughed for the first time.
Eligible employers can apply for a grant from HMRC to cover the wage costs of furloughed employees as follows:
Discretionary fees, tips, commission and bonuses are excluded as are additional employer pension contributions above the minimum automatic enrolment amount. However, guaranteed contractual commission and fees can be covered. Enhanced maternity, paternity, adoption and shared parental pay can be claimed up to the limits noted above.
If your employee is getting Maternity Allowance while they’re on maternity leave, they should not get furlough pay at the same time. However, your employee can end her maternity leave early to be put on furlough. If your employee agrees to be put on furlough and end their maternity leave early, they will need to give you at least 8 weeks’ notice and they will not be eligible for furlough pay until the end of the 8 weeks.
Employers can claim the higher of:
• the same month’s earnings from the previous year; or
• average monthly earnings from the 2019-20 tax year.
For employees who have been employed for less than a year, you can claim for an average of their monthly earnings since they started work.
If the employee only started in February 2020, you can claim based on a pro-rata calculation of their earnings so far.
This is possible and employers are free to agree this with employees.
Yes, in the same way as normal pay.
Claims can be backdated to 1 March 2020 where employees have already been furloughed. However, the grant is only available from when an employee has finished work and started furlough. The Scheme was not in existence on 1 March but this means that employees who were laid-off or sent home and have ceased all work could claim. However, if employees have been working from home then the employer can only claim furlough status from when they stop working.
This is fine as employees are not working anyway. However, employees must receive at least minimum wage for time spent training and, if necessary, this will be at the employer’s cost.
No. When on furlough an employee cannot undertake work for or on behalf of the employer. This includes providing services or generating revenue. Employees on furlough are permitted to undertake voluntary work and/or training provided that employees undertaking online training, for example, must be paid National Minimum Wage or National Living Wage for the time spent training. Voluntary work does not mean that the employee can volunteer their services to continue working for the employer but rather is in relation to voluntary work unconnected to work which is providing services to the employer. The JRS does not cover employees who are working reduced hours or placed on short time working. However, since 1 July 2020, employers are now able to bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim under the Scheme for their normal hours not worked.
Yes, recent guidance has confirmed that whilst on furlough, employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers. However, in doing this, they must not provide services to or generate revenue for, or on behalf of the organisation or a linked or associated organisation.
No. Under the JRS employees are not permitted to undertake work even if the employer tops up salary unless they are simply undertaking training or volunteer work as outlined above.
The JRS is scheduled to run from 1 March 2020 until end October 2020 (as announced on 12 May.) It will continue at 80% until end July with more details on how the scheme will operate after that coming at the end of May.
An employee could be placed on furlough leave for the whole of that period (claims can be backdated if applicable).
The minimum period of furlough leave is 3 weeks. An employer is permitted to submit one claim every 3 weeks. This means that an employer could furlough employees on a rotating 3-weekly basis. Each period of furlough can be extended by any amount of time whilst the employee is on furlough. However, the scheme end date is the last day you can claim for through this scheme.
From 1 July, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
Where a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July.
For example, a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this the employee can they can then be flexibly furloughed for any period. However, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June.
Although flexible furlough agreements can last any amount of time, the period that you claim for must be for a minimum claim period of 7 calendar days. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.
Yes, the Government Guidance confirms that employees who are shielding can be furloughed.
In the absence of a contractual lay off clause, yes. This means that an employer should consult with employees and seek their consent. In the absence of consent, it may be that there will be a redundancy situation and the normal redundancy rules will apply.
Yes, if the employee was on PAYE payroll on 28 February and prior to 19 March 2020 and they were made redundant or otherwise stopped working then they can be re-hired and furloughed.
Yes, an employee could be furloughed by both employers.
Subject to any restrictions in the employment contract (which could be waived at the employer’s consent), yes the employee can get another job and receive that wage as well as the furlough wage.
Furloughed employees remain employed and will retain all of their normal employment rights, for example the right to SSP and the right to annual leave.
An employer will need to submit the following information to HMRC’s online portal, once it is operational:
You will also need to provide either:
If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. You’ll need to:
You do not need to place all your employees on furlough and you can continue to fully furlough employees if you wish. Employees cannot undertake any work for you during time that you record as them being on furlough.
If the employer is claiming for more than 100 furloughed employees, then it is necessary to upload a file containing each employee’s:
The format of the file you upload must be either:
Employers will need to calculate the amount that they are claiming and should note that HMRC retains the right to retrospectively audit all aspects of the claim.
If you do not finish your claim in one session, you can save a draft. You must complete your claim within 7 days of starting it.
HMRC will then check that the claim is correct and pay the claim amount by Bacs into your bank account within 6 working days.
Employers must keep all records for six years including:
It is still up to the employer to pay the wages to the employee directly. If this is not done, then this will be a breach of contract regardless of whether or not money has been received from HMRC. However, it may be possible to agree with employees that payment will be late. Employees would be within their rights to refuse to consent to this and to make a claim to the Tribunal for unlawful deduction from wages. However, it would take some time for this claim to be processed and, in the circumstances, the employees may be content to wait.
Yes, details are available here https://www.gov.uk/government/organisations/hm-revenue-customs/contact/get-help-with-the-coronavirus-job-retention-scheme but a high number of calls are anticipated and employers are encouraged to only contact HMRC if it is essential.
In relation to your salary which goes through the PAYE scheme – yes, you can access the Job Retention Scheme for 80% support up to a maximum of £2,500 per month if you were on the scheme as of 19 March 2020. However, as with normal furloughed employees you cannot work for the company. However, there are limited exceptions in relation to doing work which include: where it is necessary in fulfilling a duty or other obligation arising by or under an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company, making a claim under the Scheme in respect of an employee of the director’s company; and making a payment of salary or wages of an employee of the director’s company.
In relation to the balance of your income which is extracted via dividends, unfortunately the Self-Employment Income Support Scheme (SEISS) will only support self-employed individuals (including members of partnerships) however is not extended to directors of limited companies.
Those who do not qualify for the scheme will be able to explore other support including an increase in the Universal Credit allowance, income tax deferrals, £1 billion more support for renters and access to three-month mortgage holidays.
Yes, those paid annually are eligible to claim, as long as they meet the relevant conditions. This includes being notified to HMRC on an RTI submission on or before 19 March 2020, which relates to a payment of earnings in the 19/20 tax year. The requirement for there to be payment of earnings in the 19/20 tax year applies for any employee being claimed for under the scheme, irrespective of how frequently they are paid (e.g. weekly, fortnightly or monthly). This will be relevant for those on an annual pay period if the last payment notified to RTI was before 5 April 2019 and no further payments were notified until after 19 March 2020. An employer can make their claim in anticipation of an imminent payroll run, at the point they run their payroll or after they have run their payroll.
There is no obligation to bring an employee back to work after the period of furlough. If the employer chooses to make individuals redundant the usual rules for redundancy will apply.
Note employees will maintain rights against unfair dismissal and to redundancy payments during the period of furlough.
The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme. It is a condition of the Scheme that all of the money received goes to the employee without deduction. However, recent guidance has confirmed that if an employee had previously authorised their employer to make deductions from their salary, these deductions can continue while the employee is furloughed provided that these deductions are not administration charges, fees or other costs in connection with the employment.
While it is possible for furloughed employees to get a new job the Scheme states that furloughed employees cannot work for a linked organization so this would not be permissible. Specialist advice should be sought before engaging in any arrangement such as this to ensure that you are acting in accordance with the Scheme.
If you make a mistake it is possible to delete a claim in the online service but you must do this within 72 hours. If you have made an error in a claim that has resulted in an over-claimed amount, you must pay this back to HMRC. You can report an over-claimed amount as part of your next claim. You will be asked when making your claim whether you need to reduce the amount down to take account of a previous over-claim. Your new claim amount will be reduced to reflect this over-claimed amount and you should keep a record of this adjustment for six years.
If you have made an error in a claim and do not plan to submit further claims, you should contact HMRC to notify them about your error and find out how to pay back any over-claimed amounts. Once you have contacted HMRC you will be given a payment reference number and directed to make a payment.
If you have made an error that has resulted in an under-claimed amount, you should contact HMRC to amend your claim. As you are increasing the amount of your claim, they will need to conduct additional checks
The conditions of furlough, including how long it will last, should be notified to the employee at the time when they are furloughed. Complications may arise where the employer I seeking to un-furlough some employees, but not others. As with the decision to furlough employees in the first place, the decision to un-furlough them should be on justifiable, non-discriminatory, business grounds. Justifiable considerations may include skills/experience of employees, time spent on furlough (first furloughed first un-furloughed), the amount of work available and the preferences of the employees.
Communication with staff is key and returners will have to be reassured that their return is in accordance with public health guidance. Where possible, working from home should be encouraged.
Since 1 July 2020, employers are now able to bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim under the Scheme for their normal hours not worked.
The Scheme closed to new entrants from 30 June. Generally now, employers are only able to furlough employees that they have furloughed for a full 3-week period prior to 30 June.
This means that the final date by which an employer needs to agree with their employee and ensure they place them on furlough was 10 June and in most cases it is no longer possible to furlough an employee that had not previously been furloughed. There is an exception for parents coming back from statutory maternity, paternity, adoption or shared parental leave after 10 June. There is also an exception for employees who are military reservists and are returning to work following a period of mobilisation that started prior to 10 June and they are returning after 10 June. In these cases the employees are eligible to be furloughed provided their employer had already used the Scheme and they were on your PAYE payroll and you submitted an RTI submission for them on or before 19 March 2020. Employers will have until 31 July to make any claims in respect of the period to 30 June.
From August 2020, the level of government grant provided through the Scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.
The Scheme updates mean that the following will apply for the period people are furloughed:
• June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
• August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions.
• September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
• October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
In short - yes.
On 29th May, the government announced further information in relation to the flexibility of the CJRS.
From 1 July businesses will be allowed to bring back furloughed employees on a part time basis for any amount of time and any shift pattern and will still be able to claim CJRS grant for their normal hours not worked. To claim the CJRS for furloughed hours, employers will need to report and claim for a minimum period of a week. Businesses will be responsible for paying employees wages for the number of hours worked.
Although you have advised that your employees are currently furloughed, it is important to note that the CJRS will close to new entrants from 30 June – this means that the final date by which an employer can furlough an employee for the first time will be 10 June to ensure they meet the current 3 consecutive week furlough period.
In relation to the support available, from 1 August 2020, the government has announced it will commence tapering the level of support made available via the furlough scheme.
What this means:
June & July: Government to pay 80% of wages up to a cap of £2,500 plus employers NIC and Pensions Contributions. Employers are not required to contribute.
August: Government to pay 80% of wages up to a cap of £2,500. Employers to pay employers NIC and Pensions Contributions.
September: Government to pay 70% of wages up to a cap of £2,188. Employers to pay employers NIC and Pensions Contribution plus 10% of wages to make up to 80% up to a cap of £2,500.
October: Government to pay 60% of wages up to a cap of £1,875. Employers to pay employers NIC and Pensions
Since 1 July, employers are able to bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim under the Scheme for their normal hours not worked. This means that furloughed employees will no longer need to avoid doing any work for you. They can start to work for some of the week but be furloughed for the rest of it. It is up to the employer (with agreement from the employee) to decide the hours of work and the hours of furlough.
Flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
Where a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July.
For example, a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this the employee can they can then be flexibly furloughed for any period. However, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June.
Although flexible furlough agreements can last any amount of time, the period that you claim for must be for a minimum claim period of 7 calendar days. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.
If your employee is fully furloughed, you do not need to work out their usual and furloughed hours and you should claim in the same way you have previously. If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period. This can be complicated particularly if your employee works variable hours or if you are only claiming for part of a pay period. HMRC has produced a number of worked examples which may be of assistance.
You can calculate the usual hours for the entire claim period or for each pay period, or part of a pay period, that falls within that claim period. If you calculate the usual hours for the entire claim period and the result is not a whole number, you should round it up to the next whole number. If you calculate the usual hours on a pay period basis you should round the result up or down to the nearest whole number.
You must subtract the amount which is paid to the employee for the claim period from the amount you claim under the scheme, if your employee is paid:
Your employee cannot be furloughed while they receive statutory sick pay and your employee cannot receive statutory sick pay while they are furloughed.
The maximum wage amount is £2,500 a month, or £576.92 a week.
Before 1 July this was the maximum amount you could claim for wages under the scheme. From 1 July, the calculations are changing so this isn’t necessarily the amount you can claim, but you still need to work this out to allow you to calculate how much your employee should be paid and the amount of grant you can claim towards their wages. You will also need to work out 80% of your employee’s usual wage.
If the length of time you’re claiming for is not one week or one month, you’ll need to use the daily maximum wage amounts to work out the maximum amount for each employee.
To work out the maximum amount you can claim, multiply the daily maximum wage amount by the number of calendar days your employee is furloughed for in your claim.
|
Month |
Daily maximum wage amount |
|
March 2020 |
£80.65 per day |
|
April 2020 |
£83.34 per day |
|
May 2020 |
£80.65 per day |
|
June 2020 |
£83.34 per day |
|
July 2020 |
£80.65 per day |
|
August 2020 |
£80.65 per day |
|
September 2020 |
£83.34 per day* |
|
October 2020 |
£80.65 per day* |
*In September and October, this is the maximum amount you will have to pay a furloughed employee. The amount that you can claim for will be lower.
If your claim period includes dates from two or more calendar months, you’ll need to calculate the maximum amount for each calendar month and add them together. This will only apply to claim periods ending on or before 30 June, as periods from 1 July onward cannot cover more than one calendar month.
If you’re claiming for multiple pay periods in one claim, you can calculate the total maximum using a mixture of:
No, you could choose to keep an employees furloughed.
No, holiday pay continues to accrue at 100% regardless of whether the employee is working full time, furloughed or on flexible furlough.
Recent guidance has confirmed that employees should not be placed on furlough for a period simply because they are on holiday for that period. Presumably this is because HMRC would view this as being an abuse of the scheme.
From 1 July claim periods must start and finish in the same month and last at least 7 days unless if you are claiming the first few or last few days in the month and you have already claimed for the period ending immediately before it. The crucial point is that you cannot make claims that cross calendar months. Claims for periods ending on or before 30 June must be made by 31 July. The first time that you can make a claim for days in July is 1 July.
On 8 July the Chancellor announced a scheme to reward employers who successfully bring staff back from furlough. Under this scheme if you bring back an employee who was furloughed and continuously employ them through to January 2021 you will receive a Job Retention Bonus of £1,000 per person. Employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further detail about the scheme will be announced by the end of July.