Coronavirus Job Retention Scheme

For periods ending on or before 30 April, employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. Employers do not need to have previously claimed for an employee before the 30 October 2020 to claim. 

For periods starting on or after 1 May, employers can claim for employees who were employed on 2 March, as long as they have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. Employers do not need to have previously claimed for an employee before the 2 March 2021 to claim for periods starting on or after 1 May 2021. 

Employers can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and employers can furlough employees on all categories of visa.

Employers will be able to furlough employees on a part-time basis while permitting part-time work, with employers able to agree any working arrangements with employees. Employers will be required to pay the worker’s normal wages for any hours worked when not on furlough, while still being able to claim the grant for the hours not worked.  

The JRS will remain in its current form until the end of June 2021 which means that employers must continue to pay staff’s wages, National Insurance Contributions and pensions for hours worked, as well as NICS and pensions for hours not worked. Employers will also be able to claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.  

There will be no minimum furlough period, that is no minimum amount of time that an employee must be on temporary leave, allowing employers a high degree of flexibility to decide the hours and shift patterns employees will work on their return.   

It’s important to note that there is no obligation for an employer to use “flexible furlough” – employers are free to continue full furlough for employees until the scheme ends on 30 September.  

Until 30 June 2021, the government pays 80% of wages of an employee’s salary for hours not worked up to a cap of £2,500 per month. Employers pay NICs and pension contributions for the hours their employees are furloughed.  

From 1 July 2021, the government will increase employer contributions towards hours not worked to 10% in July and to 20% in August and September. 

Changes to the grant contribution in 2021: 

No, the extended JRS is open to all employers with a UK bank account and UK PAYE schemes. To claim for periods ending on the 30 April, companies do not need to have previously claimed for an employee before the 30 October 2020. To claim for periods starting on the 1 May, employers do not need to have previously claimed for an employee before the 2 March 2021. 

No, there is no maximum number of employees an employer can claim for. 

Employers can claim for regular payments they are obliged to pay their employees. This includes compulsory commission, as well as fees and past overtime. However, discretionary commission should be excluded, as well as discretionary bonuses (including tips) and non-cash payments.   

No. But an employer can choose to top up an employee’s salary beyond the guaranteed 80% but is not obliged to. 

No. Until the scheme ends on the 30 September, part-time furloughing of employees continues to be possible and employers are able to agree any working arrangements with their employees. This means that there is no minimum furlough period; that is, no minimum amount of time that an employee must be on temporary leave.   

Yes, the period that an employer can claim for must be for a minimum claim period of seven calendar days (one week).  

No. Claim periods must start and end within the same calendar month and last at least 7 days.  

Employers can claim for a period of less than 7 days when claiming for the first few days or the last few days in a month. Employers can only claim for a period of fewer than 7 days if the period being claimed for includes either the first or last day of the calendar month, and employers have already claimed for the period ending immediately before it.  

No. During hours in which an employee is recorded as being on furlough, an employer cannot ask them to do any work that: makes money for their organisation or any organisation linked or associated with their organisation or provides services for their organisation or any organisation linked or associated with their organisation. But employees can take part in training, volunteer for another employer or organisation, work for another employer (if contractually allowed). 

Yes. Furloughed employees can engage in training during hours in which an employer records them as being on furlough, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation or a linked or associated organisation.  

Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time. 

No. Individuals are only entitled to the NLW/NMW for the hours they work. Furloughed workers are not allowed to work for you during this period, so there is no minimum wage to comply with. Employers have to pay the lower of 80% of their salary or £2,500. This is the case even if, based on their usual working hours, this falls below NLW/NMW.  

Employers remains liable for associated Employer NIC and minimum automatic enrolment. If the employer decides to pay a top up, the employer will be responsible for paying the additional NIC and automatic enrolment.  

Employers are also responsible for any voluntary automatic enrolment contributions above the minimum mandatory employer contribution of 3% of income above the lower limit of qualifying earnings.   

Until the end of the scheme on 30 September, employers are required to pay NIC and minimum automatic enrolment for the hours that their employees are furloughed.   

The guidance does not clarify this question.  

Employees that have been furloughed have the same rights as they did previously – this includes employees’ entitlement to SSP where they are eligible. The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness. 

If employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee. 

However, if an employee becomes sick while furloughed it is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate. If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary.  

Apprentices can be furloughed and continue to train during this period. This includes the 20% of-the-job requirement for the Apprenticeship Levy. All apprentices must be paid the appropriate minimum wage for the time they spend training – i.e. the Apprenticeship Minimum, National Living or National Minimum Wage. Employers need to pay this in full, covering any shortfall between an employee’s appropriate minimum wage and amount they can recover via grant. The grant does not cover employers’ Apprenticeship Levy obligations.

No. All employers with a UK bank account and UK PAYE scheme can claim the grant. To claim for periods ending on the 30 April, companies do not need to have previously claimed for an employee before the 30 October 2020. To claim for periods starting on the 1 May, employers do not need to have previously claimed for an employee before the 2 March 2021. 

Yes. During the extended JRS employers will still be able to bring employees off furlough and re-furlough them at a later date.   

Yes. 

Yes, furloughed workers can take annual leave and the JRS grant continues during this time. Holiday pay must be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Employers will have the flexibility to restrict when leave can be taken if there is a business need and the correct notice is given. In cases where an employee usually works on bank holidays the employer can agree that this is included in the grant payment. If an employee usually takes the bank holiday as leave then the employer would either have to top up the employee’s pay to their usual holiday pay or give them a day of holiday in lieu.  

Yes, so long at is it contractually allowed by the original employer. The second employer will need to complete a starter checklist, which can be found here.   

Yes. Complying with statutory duties does not constitute ‘work’ during the period of furlough.   

Employees that are Tier 2 migrants can be furloughed. The Home Office has confirmed that employers do not need to top up an employee’s salary beyond the 80% or £2,500 cap paid by the government to meet minimum Tier 2 salary thresholds.   

Yes. Employers will need to ensure that their consultation and notification processes for furloughing employees is in line with relevant equalities and employment law.    

Yes. When furloughing employees, employers are still subject to relevant employment and equalities laws. This includes proper consultation with employees and notification that they will be put on furlough.    

The guidance does not specify that employees need to physically sign a new employment contract. To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme. Collective agreement reached between an employer and a trade union is also acceptable for the purpose of such a claim.   

Employees can enter into a flexible furlough agreement more than once. There needs to be a written record of the agreement, but the employee does not have to provide a written response. A record of this communication must be kept for five years. If employees are furloughed part-time the employer should keep records of how many hours their employees work and the number of hours they are furloughed.  

Yes. Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. This applies to employees that cannot work because they are caring for children or a vulnerable individual in their household.   

Yes. Employees who are unable to work because they are clinically extremely vulnerable in line with public health guidance can be furloughed. Employers must ensure they follow all existing employment and equalities law – the decision to furlough an employee in a vulnerable group should be an agreement between both parties.    

Yes. Both employees and their employer must agree before an individual can be put ‘on furlough’ – usual consultation and notification processes apply.   

No. Employers can make employees redundant while they are ‘on furlough’ or immediately after. If an employee is made redundant while on furlough, their redundancy rights are not affected – this includes rights against unfair dismissal and redundancy.   

On 31 July the government introduced new legislation that ensures furloughed employees receive statutory redundancy pay based on their normal wages, rather than a reduced furlough rate. The changes will also apply to statutory notice pay and awards for unfair dismissal cases that need to be based on full pay rather than wages under JRS. But this legislation does not impact any enhanced redundancy pay that may be stipulated in the terms and conditions of an employee’s individual employment contract.  

Employers cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation). If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, you will need to make an adjustment. 

For claim periods between 1 November 2020 and 30 April 2021: if an employer made employees redundant, or they stopped working for the firm on or after 23 September 2020, employers can re-employ them and put them on furlough. This applies as long as the employee was employed by the firm on 23 September 2020 and a PAYE Real Time Information submission was made to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.  

To calculate the pro-rated subsidy for flexible furlough, the employer will have to calculate the employee’s usual working hours in the relevant claim period and subtract the hours actually worked during the period. This will give the number of furlough hours in the claim period. Employers should then pro-rate the grant claim, using the proportion of furlough hours against usual hours.   

If the employee has fixed pay, the reference period is the last pay period ending on or before 19 March 2020 for employees who either: 

• were on employers’ payroll on 19 March 2020 and a payment of earnings was made to them in the tax year 2019 to 2020 which was reported to HMRC on a Real Time Information Full Payment Submission (FPS) on or before 19 March 2020. 
• employers made a valid Coronavirus Job Retention Scheme claim for in a claim period ending any time on or before 31 October 2020. 

For all other employees who were on an employers’ payroll on 30 October 2020, the reference period is the last pay period ending on or before 30 October 2020; this will only apply for periods starting after 1 November 2020. 

Employees who were first reported on employers’ payroll between 31 October 2020 and 2 March 2021 can be furloughed from 1 May 2021. Details of how you should calculate these employees’ wages will be provided in updated government guidance in due course. 

If an employee has variable pay, how an employer works out their usual wages depends on when they were on the employer’s payroll. 

For employees who were on payroll on 19 March 2020, the employer should calculate 80% of the higher of: 

• the wages earned in the corresponding calendar period in the tax year 2019 to 2020. 
• the average wages payable in the tax year 2019 to 2020. 

For all other employees who were on payroll on 30 October 2020, employers should calculate 80% of the average wages payable between 6 April 2020 (or, if later, the date the employment started) and the day before they were first furloughed on or after 1 November 2020. 

Employees who were first reported on your payroll between 31 October 2020 and 2 March 2021 can be furloughed from 1 May 2021. Details of how you should calculate these employees’ wages will be provided in updated government guidance in due course. 

To calculate a grant claim, employers will need to calculate employee’s usual working hours subtract their actual hours worked during claim period. Workers who are on full-time furlough will receive 80% of their regular wages up to the cap of £2,500 per month. Employees on flexible furlough will receive the grant proportionate to their furloughed hours – which means any hours worked will also reduce the maximum government subsidy available on a pro-rata basis. Information about how to access and apply for grants can be found here.   

Yes, if employers are claiming for a period between 1 November 2020 and 30 April 2021 and they employ someone who was transferred from another business, they can claim under the normal rules if workers were included on a PAYE Real Time Information submission to HMRC on or before 30 October 2020. 

If employers are claiming for a period beginning on or after 1 May 2021 and they employ someone who was transferred from another business, they can claim under the normal rules if the workers were included on a PAYE Real Time Information submission to HMRC on or before 2 March 2021. 

If neither of these are the case, firms may still be eligible to claim in respect of the employees if the TUPE or PAYE business succession rules apply to the change in ownership. 

The new employer can claim for employees transferred between 1 September 2020 and 30 April 2021. The transferred employees must have been: 

• employed by the old employer on or before the 30 October 2020. 
• transferred from their old employer to their new employer on or after 1 September 2020. 
• included on a PAYE Real Time Information (RTI) submission to HMRC, by their old employer, between 20 March 2020 and 30 October 2020. 

The new employer can claim for employees transferred on or after 1 January 2021. The transferred employees must have been: 

• employed by the old employer on or before 2 March 2021. 
• transferred from their old employer to their new employer on or after 1 January 2021. 
• included on a PAYE Real Time Information (RTI) submission to HMRC, by their old employer, between 20 March 2020 and 2 March 2021. 

Yes. 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, the new scheme will be eligible to continue to furlough and claim for employees. 

Yes. During hours which employers record their employee as being on furlough, employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers. However, in doing this, they must not provide services to or generate revenue for, or on behalf of their employer’s organisation or a linked or associated organisation. 

Yes, from December 2020, HMRC will publish employer names and for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards.

Claims must be submitted by 11.59pm 14 calendar days after the month employers are claiming for. If this time falls on the weekend or a bank holiday then claims should be submitted on the next working day.