COVID-19: Job Retention Scheme – Government releases further clarification 06.04.20

An updated version of the guidance relating to the Government’s Job Retention Scheme and furlough has been published offering some additional clarification, you can read our latest article on this here.

Below is a summary of the main updates on 06.04.20:

Eligibility for the scheme:

•  The guidance now makes it clear that employers are eligible to claim under the scheme for all employees; the reimbursement is not strictly limited to those who would otherwise be made redundant.

•  Individuals can furlough employees such as nannies or cleaners if they were paid through the PAYE scheme on 28 February 2020.

•  Umbrella companies can furlough employees.

•  Company Directors can be furloughed if they are employees paid via PAYE; they must do no work during furlough but can continue to carry out their statutory duties.

•  If an employee has been made redundant, dismissed or resigned after 28 February 2020, the Job Retention scheme allows for them to be re-engaged and furloughed. Advice should be sought before such actions are taken as employment rights and liabilities will be retained during this period.

•  Employees are allowed to get another job while they are on furlough (subject to their employment contract) and this will not jeopardise the employer’s ability to reclaim the employee’s wages from the Job Retention scheme.

Furlough process:

•  It has now been made clear that furlough leave must be agreed with such employees and this must be put in writing. A record must be kept of 5 years.

•  Employees can be furloughed multiple times (subject to the minimum furlough period of 3 weeks) allowing employers to rotate employees on furlough if appropriate.

Payment:

•  The new Government guidance confirms that the calculation of 80% of salary can include wages, fees, past overtime and compulsory/guaranteed commission payments. Tips, benefits in kind and discretionary bonuses and discretionary commission payments are expressly excluded from the reimbursement.

Claims:

•  The claims portal is still not open and is expected to open by the end of April.

•  Claims can be made from the date the employee stopped working (not the date furlough leave was agreed) provided that they haven’t done any work for at least 3 weeks and they have agreed to be placed on furlough in writing.

What remains unanswered:

We are confident than annual leave will continue to accrue during furlough, but there was no further guidance offered so the following questions remain unanswered:

•  Are employees allowed to take annual leave during the furlough period?

•  Should annual leave during furlough be paid at 80% or 100%?

•  Can the employer require the employee to take annual leave during furlough?

•  What about Bank holidays?

Our currently thinking and advice on the above questions is that annual leave can continue to be taken during furlough and does not break the furlough period. Employees should be paid their normal salary during any period of annual leave, and this will also include bank holidays they were scheduled to receive. Employers can require employees to take annual leave if this is allowed in the employment contract.

What next?

For more information on the Job Retention Scheme, please read our original article. The CBW HR Consultancy team is on hand to help, please speak to your usual CBW contact, or speak to a member of the HR Consultancy team.

Please click here to view all articles relating to furlough and Coronavirus Job Retention Scheme guidance.