What follow’s is NORI’s breakdown of how the Government’s Coronavirus Job Retention Scheme works.
Employers can claim for 80% of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
Employers can use this scheme anytime during this period.
Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them.
Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.
Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:
- • full-time employees
- • part-time employees
- • employees on agency contracts
- • employees on flexible or zero-hour contracts
Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.
The scheme covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation.
If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.
Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process.
If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.
Employees who are shielding (12 weeks isolation due to high-risk) in line with public health guidance can be placed on furlough.
A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.
If the employee’s pay varies and has been employed for a full twelve months prior to the claim, you can claim for the higher of either:
- • the same month’s earning from the previous year
- • average monthly earnings from the 2019-20 tax year
To claim, you will need:
- • your ePAYE reference number
- • the number of employees being furloughed
- • the claim period (start and end date)
- • amount claimed (per the minimum length of furloughing of 3 weeks)
- • your bank account number and sort code
- • your contact name
- • your phone number
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1st March 2020 if applicable.
The CJRS has been implemented to support businesses and employees where there is NO WORKfor them to undertaken due to COVID-19. If there is work that individuals can carry out, even on reduced hours, businesses should be implementing a shortage of work scheme to cover this work.
We cannot advise on how in-depth the HMRC will audit your decision making when placing employees on furlough, and each furlough decision must be looked at carefully by businesses