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Coronavirus – Guidance for Employers
Update on Job Retention Scheme
(15 April 2020)

The government has revised the rules regarding the Job Retention Scheme, specifically on eligible employees. The changes are great news for those who run weekly payroll; indifferent for those who run monthly payroll. This postprovides the details as well as reminders on some previously released information on the Job Retention Scheme. For more details, please refer to previous posts.

The purpose of this post, and how we’ve been working in general, is to bring you updates based on official guidelines only. We’re aren’t going to join in the speculation about what may or may not happen, what is or is not allowed; we’re just going to summarise the official rules and confirm the areas that still need clarifying.

Questions answered in this post are:

As with all of these posts, we need to remind you that these are unprecedented times and it is unclear as to how employment law will be applied in these exceptional circumstances.

The information that follows has been compiled with input from government websites, Acas and HMRC (the only official resources that we’re happy to use as these are the institutions who will be responsible for enforcing the rules as we move forward), but the reality is no-one really knows for certain how actions that businesses need to take now will be interpreted later.

We strongly advise you to get in-touch with us on 0203 319 1649 to seek tailored guidance before you take any actions.

How have the rules around employee eligibility changed?

The change introduced today (15 April 2020) is that employees eligible for the furlough payments now include those on payroll from on or before 19 March 2020. (Previously, the cut-off date was 28 February 2020).

The restriction, however, is that the employee must have been included in a payroll submission on or before 19 March 2020 (the more technical term is an “RTI submission” – which stands for “Real Time Information”).

So, this is great news for those who run weekly payrolls but, in effect, no change for businesses which run a monthly payroll after 19th of each month.

The rules are unequivocal.

We suspect the payroll submission restriction has got a lot to do with what can be proved quickly and easily. An employment contract can be easily backdated; an RTI submission cannot. An employer may argue that they can demonstrate they paid an employee who, for example, started on 12 March 2020, as they received part-payment in the March payroll run on 31 March 2020. This, however, doesn’t demonstrate the start date; just that they were on the March payroll.

Does this change apply to those made redundant or who resigned after 28 February?

The 19 March 2020 cut-off also applies to employees made redundant or who stopped working between 28 February 2020 and 19 March 2020, as long as the employer re-employs them and then puts them on furlough.

Which employees are eligible for furlough?

Employees eligible for furlough can be on any type of employment contract, including:

  • full-time
  • part-time
  • agency
  • flexible, or
  • zero-hours contracts

Foreign nationals are eligible to be furloughed; you can furlough employees on all categories of visa.

What work can employees undertake whilst on furlough?

Please remember that an employee you claim to be on furlough must be on furlough.

This means that they cannot perform any work, including those that provide a service or generate revenue. They can, however, undertake training.

HMRC has advised they have the right to retrospectively audit any company that makes a claim and that the information needs to be held for 5 years. We suspect, therefore, that there will be pretty tough sanctions against any false claims.

Refer to our previous posts for more details on this.

What income taxes does an employee on furlough pay?

While on furlough, the employee’s wage will be subject to usual income tax and other deductions.

Employment laws still apply

When making changes to working hours or other terms and conditions, assuming your employment contract does not already allow for that, normal employment law applies – refer to our post on employment law: Job Retention Scheme – Employment Laws Still Apply (23-Mar-20).

Also, the employer must be careful not to discriminate in deciding who to offer furlough too – refer to our post on furlough discrimination: Furlough Decisions – Beware of Unintended Discrimination (24-Mar-20).

If you’d like help with the impact of Coronavirus or any other HR matter, contact us on 0203 319 1649 or fill in the form below.

Contact Us

If you’d like help with the impact of Coronavirus or any other HR matter, contact us on 0203 319 1649 or fill in the form below.

Contact Us

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0203 319 1649

contact@lighterhr.co.uk

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