Coronavirus Job Retention Scheme (CJRS) and Furloughed Employees

Updated: 27/03/2020

On 20th March 2020, the Government announced measures to protect employers and employees under the Coronavirus Job Retention Scheme (CJRS). 

This funding will be open to all employers with a PAYE payroll scheme that was created and started on or before 28th February 2020, including charities. Employers can apply for grants (not loans) of 80% of ‘Furloughed Employees’ (employees on a leave of absence) monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage, provided they keep the worker employed. The scheme will cover the cost of wages backdated to 1st March 2020, if applicable.

HMRC are still developing the scheme but further details can be found for employers on GOV.UK and guidance for employees.  They are aiming to have the scheme up and running by the end of April 2020.

In essence the CJRS applies to any UK organisation with employees including:

  • Businesses
  • Charities
  • Recruitment Agencies (agency workers paid through PAYE)
  • Public Authorities

As an employer you must have created and started a PAYE payroll scheme on or before 28th February 2020 and have a UK bank account.

Furloughed Employees must have been on your PAYE payroll on 28th February 2020, and can be on any type of contract, including:

  • Full-time employees
  • Part-time employees
  • Employees on agency contracts
  • Employees on flexible or zero-hour contracts

The scheme also covers employees who were made redundant since 28th February 2020, if they are rehired by their employer, but points to note:

  • The Furloughed Employee must not carry put any work whatsoever apart from volunteering or training, providing it does not generate any money for their employer.
  • Employers can “furlough” employees if they have a contractual lay off clause in their employment contracts.  If not, they will need to comply with employment law.
  • Employers must comply with employment law when designating employees as “furloughed Employees”. This means that employers will need to consult with employees and seek their consent unless there are special circumstances.
  • Holiday entitlement will continue to accrue while employees are “furloughed”.
  • Contractual benefits appear to continue while employees are “furloughed” unless otherwise agreed.

As you can see this subject is complex and changing rapidly.  CVC are able to offer advice to both employees and employers on this subject.  If you would like to speak to one of our team please call 01736 362362 or email and we shall be pleased to guide you through his difficult subject.

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