Coronavirus Job Retention Scheme – Government Support for Employee’s Wages
The Government’s announcement on Friday will have given some considerable comfort to business owners and their employees across the country.
Here is what we know so far:
1. All UK businesses are eligible.
- Eligible employees will be paid 80% of their wage costs, capped at £2,500 per month.
- The scheme will start in April 2020, but payments will be backdated until the 1st March 2020 to allow businesses to re-employ those who have already been dismissed and to recoup their income.
- It will be necessary to “furlough” employees before they are eligible.
This means a temporary suspension of employment for a specified period of time, during which the employee does not receive a wage. An example of this, is when a factory shuts down at the same time each year.
For practical purposes, this means that employers should keep employees on their payroll throughout this period, rather than laying them off or making them permanently redundant.
This is a contractual change, and even though employers may feel that it is in their employee’s best interests, the employee will still need to consent to this change. Please ensure that the consent is in writing (an email will do).
- Employers will be invited to submit information to a special portal (not yet set up) on HMRC’s website. It is understood that this will be calculated on the basis of PAYE submissions.
- It is not yet clear whether this support will apply to worker as well as employees. As regards those with Zero Hour contracts, on the basis that the calculations will be done on PAYE, it is likely that they will receive the support, as long as they have worked regularly in the weeks leading up to the 1st March.
Please note that the information contained in this article was correct at the time of writing. There may have been updates to the law since the article was written which may affect the information and advice given therein.