The Coronavirus Job Retention Scheme guidance has been updated once again, this time to refer to a new relevant date of 19th March 2020. However, this does not mean that employers can re-employ and furlough employees who were employed after 28 February, in particular:
- Employers can now claim for furloughed employees that were on their PAYE payroll on or before 19 March 2020. They must have been notified to HMRC via real time information (RTI) submission on or before 19 March 2020.
- For employees that were employed prior to or on 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer, the employer can re-employ them and put them on furlough. This applies to employees that were made redundant, or stopped working after 28 February, even if the employer does not re-employ them until after 19 March. This does not apply to employees that were employed after 28 February.
- A new employer is eligible to claim in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership. Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 19 March 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS.
- Employers can claim for 80% of the employee’s salary, as in their last pay period prior to 19 March 2020. If, based on previous guidance, employers have calculated their claim based on the employee’s salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020) the employer can choose to still use this calculation for their first claim.
The Treasury has also now issued a Direction to HMRC containing detailed instructions for making payments under the Coronavirus Job Retention Scheme. This Direction includes confirmation that:
- it applies to those who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”. It is not limited to those employees who would otherwise be made redundant.
- a director who is furloughed can only undertake work to fulfil an obligation arising from an Act of Parliament relating to the filing of company’s accounts or provision of other information relating to the administration of the director’s company. This is therefore very limited.
- to claim furlough, the employer and employee must have agreed in writing that the employee will cease all work. Therefore it is essential that employers have received, and retain evidence of, written agreement from furloughed employees
- the amount claimed must only be “regular salary or wages” and further guidance has been given in the Direction as to what this relates to.
A number or issues are still yet to be clarified, such as annual leave during furloughed leave. If you have any queries in relation to furloughed leave, or any other workplace issues, please contact our employment team.