Coronavirus Job Retention Scheme – Further information

27 March 2020

An ‘FAQ’ document sent by Dr Luke Evans MP (MP for Bosworth) purports to give further information on the Job Retention Scheme. Presumably it is meant to provide employers/employees with further clarity before the formal regulations are implemented:

  • The scheme applies to all employees working through PAYE, whether permanent, temporary, part-time, zero hours or otherwise.
  • The 80% is based on the higher of (i) the earnings in the same pay period in the previous year; or (ii) the average earnings in the previous 12 months (or less, if they’ve worked for less).
  • In order to qualify, the employer must pay at least 80%.
  • The payments are taxed as income.
  • Employees taken on after 1 March 2020 are excluded from the scheme.
  • Scheme can be backdated to 1 March or later, provided the employee was furloughed at that time.
  • Businesses can re-employ people who have been made redundant since 1st March, and then furlough them. It isn’t clear but the interpretation could be that, in those circumstances, the furlough is deemed to have started from what was the termination date and payments recoverable from that date.
  • To qualify for the payment, an employee must be furloughed for a minimum of three weeks.  They can then come off furlough.
  • Employees can be made redundant whilst on the scheme (note 3 week qualification above) and can be made redundant after it. Payments cease when the employee is made redundant.
  • The scheme will not allow for a pro rata payment for workers that have taken reduced hours.
  • Employees on furlough leave can do volunteering or training, providing it does not generate any money for their employer. No mention of whether workers can do paid work for another employer/company.
  • The aim is to get the scheme up and running before the end of April.

Whilst the document is helpful, it is clear the scheme is still being worked through and there will be further provisions and clarifications.