The Coronavirus Job Retention Scheme
One of the biggest announcement by the Government has been the ‘Coronavirus Job Retention Scheme’ which has brought a raft of measures to allow employers to continue paying part of their employees salary during the outbreak.
The purpose of the Scheme is support employers and avoid employees being laid off because of the crisis and to safeguard workers from being made redundant.
What does the scheme do?
The Government will now support employers who have requested their employees to stop working but allow them to be kept on the payroll (known as ‘furloughed workers’). This is because the HMRC have pledged to pay employers a grant worth 80% of an employees’ usual wage costs (up to the cap of £2,500.00) per month.
Wage costs in this instance includes the affected employee’s salary, employer National Insurance contributions and the minimum automatic enrolment pension contributions.
Who is eligible?
The Scheme is wide-ranging applying to all UK employers with a PAYE scheme which was in place on or before 28th February 2020. This therefore includes (1) Businesses (2) Charities (3) Recruitment Agencies (*Agency Workers paid through PAYE*) and (4) Public Authorities.
It is imperative that the employer seeking the grant must also have a UK bank account.
When does the scheme come into force?
The scheme has been backdated to 1st March 2020 (if applicable) and will cover the costs of wages from this date for the next 3 months, however the Government have stated that it can be extended if necessary.
How do you apply?
Currently the HRMC are working around the clock to set up a system which will allow it to pay these grants. The Government have announced that an online portal will be made available before the end of April where grants should be paid within the coming weeks.
Before applying and submitting the information, employers will need to designate affected employees as ‘furloughed workers’ and notify them of this change. This remains subject to existing employment law and could be subject to negotiations depending on the employment contract of those employees.
If you are unsure of how to implement this scheme and furlough your employee’s / workers, then do not hesitate to contact our offices, where we can guide and offer your business the assistance it requires.