• The scheme will be open to all UK employers for at least three months starting from 1 March 2020. It is intended to be up and running by the end of April to support employers whose operations have been severely impacted by COVID-19.
  • Employers will be able to use a portal to claim for 80% of furloughed employees usual monthly wage costs.
  • We now have confirmation of the calculation basis; up to £2,500 per month, plus the associated employer NIC and minimum automatic enrolment employer pension contributions on that wage.
  • Employers can use this scheme anytime during this three-month period.

Eligibility

  • The scheme is open to any UK employer that had a PAYE scheme operational on 28 February 2020. The employer must operate a UK bank account.
  • Where a business is taken under the management of an administrator, the administrator will be able to access the JRS.

Directors

  • This area is not clear at the moment. Where Directors are entitled to continue running their businesses in terms of performing their statutory duties as officeholders they must not be raising any revenue by performing other work. This would question whether the Director meets the requirement of a ‘furloughed employee’.

What is the employer able to claim?

  • The employer will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated employer NIC and minimum automatic enrolment employer pensions contribution on the subsidised wage. More information is going to be published on this calculation basis before launch.
  • Fees, commission and bonuses are excluded.

What must the employer pay?

  • The employee must be paid at least the lower of 80% of their regular wage or £2,500 per month.
  • The employer may choose to top up the employee’s wage further but is not obliged to. If the employer does so the additional employer NIC and automatic enrolment contribution with not be funded through the JRS.

Notifying the employee

  • The employer should write to the furloughed employee to confirm that they have been furloughed and keep a record of the communication notice.
  • The employer will need to consider the employment law aspects of furloughing with an employment law specialist.
  • The guidance does not deal with employees returning from furlough to work and being replaced by a newly furloughed employee. This would seem to imply such use of the scheme is not intended or anticipated. Further clarification on this may be forthcoming as the scheme starts.

Particular categories of employee

  •  If an employee is on unpaid leave he cannot be furloughed unless the leave period commenced after 28 February.
  • If an employee is on sick leave or self-isolating, he should get statutory sick pay. Whilst he cannot be furloughed in that period he can be after.
  • Where an employee is shielding in line with public health guidelines he can be furloughed.