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Coronavirus (Covid-19):Furlough Scheme-UK

April 13, 2020 - by mindadmin

 

As part of its response to the COVID-19 pandemic, the government has introduced the Coronavirus Job Retention Scheme. 

  • Employers eligibility: Any employer (of any size) is eligible for the scheme. This includes businesses, charities, recruitment agencies (if the agency workers are paid through PAYE) public authorities. To be eligible the employer must have created and started a PAYE payroll scheme on or before 19 March 2020 and have a UK bank account.

 

  • Employees eligibility: The employees that can agree to be furloughed are those working for businesses that would otherwise have to be dismissed as redundant or laid off. The furloughed employees must have been on the employer’s PAYE payroll on 19 March 2020, including full-time employees, part-time employees, agency employees on agency contracts (provided they are not working at all) zero-hour contract workers. To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf of, of the organization or any linked or associated organization. As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme.

 

  • Agreeing to furlough employees: Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way. To be eligible for the grant employers must confirm in writing to their employees confirming that they have been furloughed. A record of this communication must be kept for five years. You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.

 

How much you can claim: You’ll need to claim for 80% of your employees’ wages (even for employees on National Minimum Wage) – up to a maximum of £2,500 per month. Do not claim for the worker’s previous salary: Employer national insurance contributions that are paid on the subsidized furlough pay: Employer pension contributions that are paid on the subsidized furlough pay, up to the level of the minimum automatic enrolment employer contribution. The maximum level of grant for employer pension contributions on subsidized furlough pay is set in line with the minimum automatic enrolment employer contribution of 3% on qualifying earnings. Grants for pension contributions can be claimed up to this cap provided the employer will pay the whole amount claimed to a pension scheme for the employee as an employer contribution. Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they have written to confirm their furloughed status.