On Saturday 4 April 2020, HMRC issued updated guidance on the Coronavirus Job Retention Scheme. The updated guidance clarifies some but not all of the unanswered questions that many employers have been left grappling with following the initial guidance published on 26 March 2020.
As at 6 April 2020
A summary of the main changes (but the full guidance should be read) are as follows:
1. As under the previous guidance, the scheme is available for all employers but workers must have been on the payroll on or before 28 February 2020. The employer must have enrolled for PAYE online and have a UK bank account.
2. All workers who stopped working for an employer on or after 28 February 2020 can be re-employed and furloughed. The reason for ceasing work is not just limited to redundancy. However, there is no obligation on employers to re-employ workers and claim reimbursement under the scheme. It remains to be seen how many employers will take this step.
3. Apprentices can be furloughed.
4. Private nannies and cleaners employed by individuals can be furloughed, provided they are paid via PAYE and were on the payroll prior to 28 February 2020.
5. Salaried Company Directors can be furloughed, provided any decision to furlough is formally adopted by the Company’s Board of Directors, documented in the company records and in writing to the individual Director. Those Directors can continue to perform some statutory duties but we do not know the extent of the duties as the guidance states they should be ‘no more than would reasonably be judged necessary’. Such duties should not, however, generate revenue or provide services to the company.
6. If workers are self-isolating or not fit for work they cannot be furloughed whilst they are in receipt of Statutory Sick Pay. Workers who are ‘shielding’ in line with public health guidance can be furloughed.
7. Workers can have two separate jobs and be furloughed for each job. They could therefore effectively claim up to £5,000 per month.
8. The previous guidance confirmed that a worker who has been furloughed can do volunteer work or training. Volunteer work or training must not be providing services or generating revenue for the employer. The updated guidance allows employers to find or support a worker in finding volunteer work.
9. As previously stated in the guidance, agreement should be reached to furlough. Employment laws continue to apply. However, the new guidance states that such agreement should be evidenced in writing. As workers can be furloughed multiple times, it would be prudent to evidence each agreement in writing as records must be kept for five years.
A link to the updated guidance can be found here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme?mc_cid=177bacbc11&mc_eid=0f04d9bea8
If you are an employer considering using the Coronavirus Job Retention Scheme and would like advice and assistance, please contact us.
Please note that this information is for guidance only and should not be regarded as a substitute for taking full legal advice on specific facts and circumstances. This article reflects the law at the time of publishing but this is a rapidly changing area and advice should be sought at the relevant time in relation to specific facts and circumstances.