Another Update – Coronavirus Job Retention Scheme
Believe it or not, since last week we’ve had two more updates in the guidance for the Job Retention Scheme. Some significant changes follow, including now allowing very new employees into the scheme. (See our previous articles here Coronavirus Job Retention Scheme – Update and Furlough Leave – the latest)
A big change and some of your newest employees may now qualify. The qualifying date, on which the employee had to have been on your payroll, has changed from 28 February to 19 March 2020. This brings into scope a large number of people who fell outside the Scheme because they had recently changed jobs.
You can only claim for furloughed employees who were on your PAYE payroll on or before 19 March 2020 and who were notified to HMRC on an RTI submission on or before 19 March 2020.This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020. Employees who were employed as of 28 February 2020 and on the payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the Scheme if you re-employ them and put them on furlough.
What other evidence is needed?
In order to claim furlough, you and the employee must have agreed in writing that the employee will cease all work. This is a significant change: the earlier guidance stated that only notification was required. This means that the scheme requires the written agreement of the employee and without it many employees who have already been furloughed may not fall within the meaning of the Scheme.
What about employees who have transferred under TUPE?
The Government has now confirmed that employees who were transferred to another organisation under TUPE after 28 February 2020 are eligible for furlough.
The new employer is eligible to claim for 80% of the employees’ wages under the Scheme if either the TUPE or PAYE business succession rules apply to the change in ownership.
What about employees who are being “shielded” or are on long-term sick leave?
The Government has confirmed that employers can furlough employees who are being shielded in line with public health guidance (or need to stay home with someone who is shielding) or are on long-term sick leave, and they do not have to be placed on sick pay.
What about employees self-isolating or on sick leave?
If your employee is on sick leave or self-isolating as a result of Coronavirus, they’ll be able to get Statutory Sick Pay, subject to other eligibility conditions applying. The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness, and there is a 3 week minimum furlough period.
Short term illness/ self-isolation should not be a consideration in deciding whether to furlough an employee. The Government has however clarified that if employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.
What about pay?
The Government has confirmed that:
- reclaimable national insurance and pension are on the furlough salary, not normal salary
- no part of the reclaimed grant can be used to fund benefits – the entire grant must be paid to the employee.
Do we have any guidance yet on how to treat Annual Leave and Bank Holidays?
ACAS has produced guidance which is has revised very recently. ACAS at first appeared to state that employees cannot take holiday whilst on furlough but have backtracked from this. They now state that Employees or workers who are furloughed can request and take their holiday in the usual way, if their employer agrees. This includes bank holidays. They also state that furloughed workers must get their usual pay in full, for any holiday they take. The guidance for the Job Retention Scheme however remains silent on holiday and holiday pay. It remains our view that the safest approach is to pay in full but in the absence of clarification in the guidance it may be worth considering payment at 80% especially if you are currently suffering financially. Clearly, if there is a later ruling that holiday should be paid at 100% whilst on furlough, a payment for the balance could be made.