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Coronavirus Job Retention Scheme Update
by Richard Stephens, employment lawyer
What is it?
It is a temporary scheme which has been put in place by the government for an initial period of three months starting from 1 March 2020. It is designed to help employers whose operations have been severely affected by Coronavirus to retain their employees and protect the economy. However, all employers are eligible to claim under the scheme.
If an employer cannot maintain its current workforce, it can furlough employees and apply for a grant that covers 80% of their wage costs up to £2,500 a month.
Who can claim?
The scheme applies to businesses, charities and public authorities.
It covers employees who are on the PAYE payroll on or before 28 February 2020.
The employees can be on any type of employment contract, including full-time, part-time, fixed term and zero-hour contracts.
Agreeing to furlough employees
Employers should discuss the proposal with relevant staff members before making any changes to their employment contract. In the vast majority of cases, it will be necessary to reach agreement with the employee before the decision is made.
When employers are making decisions about the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
To be eligible for the government grant, employers must confirm in writing to their employee that they have been furloughed. A record of this communication must be kept for five years.
It is important to note that furloughed workers cannot undertake any work for the employer.
How much can be claimed?
An employer can claim for:
80% of its employees’ wages up to a maximum of £2,500 per month; and
Minimum automatic enrolment employer pension contributions on the subsidised wage.