Following current government guidance on the Coronavirus Job Retention Scheme (CJRS), the Confederation of British Industry’s (CBI) daily webinar clarified the following points:
How much can employers claim?
- Firms can claim 80% of wages up to a maximum of £2,500 per month plus the associated Employer NICS and minimum auto-enrolment employer pension contributions on that wage. That in effect raises the cap that the government has set to a maximum ceiling of £2,804 of total grant per employee
- Furloughed workers are to be paid 80%, or a maximum of £2,500 of their salary (based on their usual working hours) even if this would be below the National Living Wage
- For employees whose pay varies, the employer can claim for the higher of either: the same month’s earning from the previous year, or average monthly earnings for the year
Who can be furloughed?
- Those in full-time and part-time contracts qualify, as do employees on agency contracts or on flexible contracts, including those on zero-hour contracts and directors or managers of a company.
- In addition, directors will be able to continue undertaking their statutory duties while furloughed, such as filling out company accounts etc.
- Employers cannot partially furlough workers. Employees placed on furlough cannot undertake work – i.e. provide services or generate revenue for or on behalf of their employer. Employees who are furloughed can volunteer to help the effort to tackle this virus
- Employers can choose some employees to furlough and not others
How long & how often can an employee be furloughed?
- The minimum time for an individual to be furloughed is three weeks.
- Employees can be furloughed multiple times.
- Holiday will continue to be accrued while the individual is furloughed.
Wayne Thomas, Partner at Bates Weston, comments:
“We are helping our clients to understand the process of furloughing employees and clarifying the position for owner-managed businesses.
If you are the director of an owner-managed business, including sole directors, and you meet the eligibility criteria for the Coronavirus Job Retention Scheme (CJRS) you should be able to furlough, but only for your salary, not your dividends. To ensure that you meet the eligibility criteria, you must stop all work, with the exception of meeting your statutory obligations as a company director.”
Wayne goes on to stress the importance of documenting your furloughing process. To ensure they are eligible for the subsidy, employers should write to their employee confirming that they have been furloughed and keep a record of this communication.
As yet the CJRS portal is not yet up and running. The expected live date is Mid-April.
If you need our help with CJRS, please do get in touch.
More details of Business Support available during Covid-19 outbreak.