The Government has now released guidance regarding the Job Retention Scheme
The main points to note are:
● Businesses, charities, recruitment agencies (for agency workers who are paid through PAYE) and public authorities can claim
● You must have started a payroll scheme on or before 28.02.2020 and have a UK bank account
● Furloughed employees must have been on your PAYE payroll on 28.02.2020. Any employees taken on after 28.02.2020 cannot be furloughed.
● employees who are full time, part time, on agency contracts (provided they are not working), and on flexible or zero hours contracts can be furloughed
● If an employee is on reduced hours or reduced pay by agreement, they cannot be furloughed.
● Not all employees need to be placed on furlough.
● Employees on unpaid leave prior to 28.02.2020 cannot be furloughed.
● Employees on sick leave or self-isolating should receive SSP but can be furloughed after that. Employees who are shielding (they have received a letter from NHS England to confirm that they are extremely vulnerable) can be furloughed.
● If your employee has more than one job then they are treated separately and can be furloughed from just one or both.
● A furloughed employee cannot provide any services for you or generate revenue even on a voluntary basis. They can otherwise volunteer or carry out training.
● If your employee carries out mandatory training whilst on furlough then you have to pay the NMW.
The government has now confirmed how much you can claim:
You can claim 80% of an employee’s regular wage up to a maximum of £2,500 plus the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions.
You can choose to top up the employee’s salary but do not have to.
Out of the money that the employee receives they have to pay their normal deductions through payroll, tax, employee national insurance contributions and employee automatic enrolment pension contributions together with any other deductions such as CSA orders for example.
For full time and part time employees the calculation is based on the actual gross salary (before tax) as at 28 February 2020. For employees who pay varies you use the higher of the same month’s earnings from the previous year or the average monthly earnings from the 2019/2020 tax year.
