Coronavirus Job Retention Scheme – Announced 20.03.2020
Late in the evening of Friday 20 March, the government published some very general guidance for employers and employees on the Coronavirus Job Retention Scheme announced by the Chancellor during Friday’s press briefing. You can read the full text they’ve released so far on their website, here.
Under this scheme, the government will pay up to 80% of wages for those employees who would otherwise be made redundant. Although the Chancellor referred to the scheme’s aim as being to avoid people being ‘laid off’, it is likely that he was using this as the commonly used term for redundancy rather than ‘lay off’ in the strict legal sense ( a right not to provide work) as the objective is to avoid people losing their jobs and in a true ‘lay off’ situation, employment continues.
Who can access the scheme?
All UK businesses are eligible to use the scheme, regardless of size.
How will the scheme operate?
- The employer will designate affected employees as ‘furloughed workers’ and notify them of this change. The early guidance suggests that this may require consultation. More on this below.
- The employer will then submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. Further guidance will be given by HMRC as to the information the employer will have to provide.
- HMRC will then give the employer a grant to reimburse 80% of all furloughed workers wage costs, up to a cap of £2500 per month.
- There is no obligation on the employer to make up the remaining 20% wages “but they may choose to do so”
HMRC are working urgently to set up a system to reimburse these monies as the current systems are not set up to facilitate payments to employers. At the press conference the Chancellor indicated that he hoped the first grants would be paid before the end of April. He also stated that claims could be made for wages lost since 1 March.
The scheme is intended to run for three months but the Chancellor said that he would not hesitate to extend this period if necessary.
Luci Martin, SYLO Associate’s Business and Strategy specialist, is available to speak with businesses on the phone should you wish to have an initial discussion around COVID-19 impacts on your business, strategies and contingency planning. Please email us to make an introduction.
Updated Mon 23rd March 2020