Job retention scheme update
Some important updates on the JRS have appeared today (26th March 2020) which give some clarity on the operation of the scheme.
This is based on FAQs from Dr Luke Evans MP. This is not (yet) an official government announcement.
- Tax and NICs will still have to be paid as normal as the grant from the scheme is a replacement for income.
- The grant will include the cost of employer NICs and auto-enrolment pension contributions.
- This scheme aims to support all those employed through the PAYE system regardless of their employment contract, including those on zero-hour contracts.
- Zero-hour and flexible contracts can cover a whole range of working arrangements.
- The 80% grant is applied to the higher of: (1) the earnings in the same pay period in the previous year; or (2) the average earnings in the whole previous 12 months (or fewer if they have worked for less time than this, including a part month calculation if they were taken in February)
- The scheme is backdated to March 1st with a view to covering those who have already been made redundant as a result of the coronavirus.
- Employees taken on after 1 March are excluded from the scheme.
- In order to qualify for the scheme, employers must pay their staff at least 80% of wages, up to the cap of £2,500 per month. It is up to them if they wish to top up the additional 20 per cent.
- If firms re-employ staff made redundant after March 1st, they are eligible to then be furloughed and the employer would qualify for the grant.
- Employees can still be made redundant while on furlough or immediately after. There is no requirement to bring the employee back to work after the period of furlough.
- If an employee is made redundant during the period of furlough then grant payments will cease.
- A worker must be furloughed for a minimum of 3 weeks for their employer to be eligible to claim under this scheme.
- If you are furloughed you can volunteer or train, provided that this does not involve the manufacture or creation of an item or part thereof than can yield revenue for the company, the provisions of services to the company, or the provision of any service that can yield revenue for the company. Firms can require workers to undertake training from home, provided it meets the above.
For more information and to find out the latest on the JRS, click here to read our most recent update.
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If your business needs legal support with any issues arising from COVID-19, please get in touch with Jon Taylor.
All information in this document is accurate at the time of writing. It is meant for general information only and is not legal advice.