Stronachs Logo

Coronavirus Job Retention Scheme - 'Furlough leave'

On Friday 20th March, the Chancellor set out a package of temporary measures to support people and businesses through the period of disruption caused by COVID-19.

Additional guidance on how the scheme will operate was issued on Thursday 26th March and can be found here.

These measures include a new 'Coronavirus Job Retention Scheme'.  Under the scheme all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been 'laid off' during this crisis.

Only limited information has been provided to date. However, the following has been set out in guidance to business

 

Eligibility

All UK employers will be eligible i.e. limited companies, LLPs, partnerships, sole traders and charities.

How to access the scheme

An employer will need to:

  • designate affected employees as ‘furloughed workers', and notify your employees of this change.

The guidance also notes that changing the 'status' of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.

  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.

HMRC advise they will set out further details on the information required.

 

What HMRC will support

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.

HMRC advise they are working urgently to set up a system for reimbursement as existing systems are not set up to facilitate payments to employers.

 

The guidance to employees notes as follows:

'Furloughed workers'

  • If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
  • To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow 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.
  • You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
  • If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
  • The Government intends for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.

As more details will follow in the days to come, this advice note will be updated. 

If you have any queries or would like advice regarding the Job Retention Scheme, get in touch with our Employment team  

 

 

Chambers Leading Firm 2020 bw

Contact Info

ABERDEEN OFFICE
28 Albyn Place, Aberdeen AB10 1YL
Tel: +44 1224 845845

 

INVERNESS OFFICE
Camas House, Fairways Business Park,
Inverness IV2 6AA
Tel: + 44 1463 713225

Legal 500uk leading firm 2020