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21 March, 2020 Open access

Government publishes further details of its ‘Coronavirus Job Retention Scheme’

New scheme to support employees who have been ‘furloughed’ as a result of the COVID-19 outbreak will run for at least 3 months from 1 March 2020

The government has published further details of its 'Coronavirus Job Retention Scheme', being launched to suppport employees 'furloughed' as a result of the coronavirus outbreak.

Announcing the new scheme yesterday, the Chancellor Rishi Sunak said that employers will be able to apply to HMRC for a grant to cover 80 per cent of the salary (up to a total of £2,500 a month) of workers who are not working but are furloughed and kept on payroll, rather than being laid off.

In guidance for employees subsequently published to gov.uk, the government advises - 

'If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, to avoid redundancies.

If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.

To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.'

In addition, in guidance for employers, the government says that -

'... to access the scheme ... you will need to - 

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required) ...'

The government adds that it intends for the Retention Scheme to run for at least 3 months from 1 March 2020, but will extend it if necessary, and that, while existing systems are not set up to facilitate payments to employers, HMRC is 'working urgently to set up a system for reimbursement'.