The Coronavirus Job Retention Scheme (CJRS) provided support to businesses and employees who were impacted by the coronavirus pandemic. The scheme ended on 30th September 2021.
This guide provided a summary of the information available about the scheme at the time.
The evolution of the Coronavirus Job Retention Scheme to date
The Coronavirus Job Retention Scheme was introduced in March 2020 to support employers to retain employees despite coronavirus restrictions impacting business.
Employees could be placed on furlough leave, during which they do not carry out work for their employer, and received 80% of their normal salary, funded by the Government. This scheme has evolved to allow employers to flexibly furlough their employees, and gradually increased employer contributions towards the 80% of the furloughed employee’s salary.
The Coronavirus Job Retention Scheme was due to end on 31st October 2020, and be replaced by the Job Support Scheme. However, in response to tighter restrictions, on the 31st October, the Government announced that they would be extending the Coronavirus Job Retention Scheme until January 2021, and then again to April.
On the 3rd March 2021, the Chancellor announced the extension of the furlough scheme until 30th September 2021.
Employer and Government contributions to furlough pay under CJRS Extension
Let’s take a look at how furlough pay is split between the employer and the government via the CJRS grant.
CJRS scheme until July 2021
Until the end of June, the Government will continue to contribute a grant for 80% of furloughed employee wages up to a cap of £2,500 for hours not worked, with employers contributing the associated NI and pension contributions. Payment of furloughed employee wages will be shared between the Government and the employer as outlined below.
The Government will cover costs for hours not worked by the employee (claimed under the CJRS) as follows:
- 80% of wages up to a cap of £2,500.
The caps are proportional to the hours not worked.
The Employer will be asked to contribute the following for the hours not worked by the employee:
- the employer National Insurance Contributions and pension contributions
The Employer will cover the pay due for any hours the employee works.
July – September
From July, employers will be asked to contribute increasing amounts towards furlough pay. We have outlined these increases below.
July
In July, furloughed employees will continue to receive 80% of wages up to a cap of £2,500 per month. Payment of furloughed employee wages will be shared between the Government and the employer as outlined below.
The Government will cover costs for hours not worked by the employee (claimed under the CJRS) as follows:
- 70% of wages up to a cap of £2,187.50.
The caps are proportional to the hours not worked.
The Employer will be asked to contribute the following for the hours not worked by the employee:
- 10% of wages up to a cap of £312.50.
- the employer National Insurance Contributions and pension contributions
The Employer will cover the pay due for any hours the employee works.
August and September
In August and September, furloughed employees will continue to receive 80% of wages up to a cap of £2,500 per month. Payment of furloughed employee wages will be shared between the Government and the employer as outlined below.
The Government will cover costs for hours not worked by the employee (claimed under the CJRS) as follows:
- 60% of wages up to a cap of £1875.
The caps are proportional to the hours not worked.
The Employer will be asked to contribute the following for the hours not worked by the employee:
- 20% of wages up to a cap of £625.
- the employer National Insurance Contributions and pension contributions
The Employer will cover the pay due for any hours the employee works.
Key changes to the CJRS
The Government have altered the way the CJRS operates since its creation in March 2020. Here are some key points for employers to note on recent changes:
March 2021 – The Budget
The Government have confirmed the extension of the furlough scheme until 30th September 2021.
Eligibility requirements for periods from 1st May 2021 about employment on 2nd March
For periods starting on or after 1st May 2021, employees are eligible to be furloughed and receive the CJRS grant if they were on the payroll on 2nd March 2021 and a PAYE RTI submission to HMRC notifying payment of earnings to the employee was made between 20th March 2020 and 2nd March 2021.
January 2021 – Coronavirus Job Retention Scheme Directive No. 6
On the 25th January HM Treasury issued the CJRS Direction No 6 which clarifies aspects of how the scheme will operate from 1st February to 30th April 2021.
There is clarification on using the lookback method for calculating furlough pay and usual hours for claims relating to March 2021 and April 2021. For these months, the direction clarifies that the reference salary used in the lookback method should relate to March 2019, and April 2019, rather than March 2020, and April 2020.
There is further guidance on calculating claims using the lookback method on the gov.uk website here: Calculate how much you can claim using the lookback method
In addition, time limit dates for submitting and amending claims relating to February – April have been confirmed. We have updated these dates in our FAQs below.
December 2020
Claiming for employees serving Statutory or Contractual Notice Periods
You are no longer able to claim the grant for employees serving contractual or statutory notice periods.
Clarification on Shielding
Guidance on shielding Clinical Extremely Vulnerable Groups suggests that individuals who are shielding can be furloughed, if otherwise eligible. Further guidance clarifies that those with caring responsibilities as a result of coronavirus can be furloughed. Therefore, it would suggest that an individual who needs to care for an individual who is shielding can be furloughed.
Publication of Employers who have claimed through the CJRS
HMRC is publishing data on a monthly basis which details claim information for employers who have made claims through the scheme for periods from 1st December 2020 onwards.
Employers can request that HMRC do not publish information about their CJRS claim if they can evidence that it would result in serious risk of violence or intimidation towards them or a person associated with the business, such as an employee.
The government have published guidance on how to request for your information to not be published here on gov.uk.
1st November 2020 – Eligibility requirement about employment on 30 October
For periods ending on or before 30 April 2021, employees are eligible to be furloughed and receive the CJRS grant if they were on the payroll on 30th October 2020 and a RTI submission to HMRC notifying payment of earnings to the employee was made between 20th March 2020 and 30th October.
However, this varies where an employee was made redundant or stopped working for you on or after 23rd September 2020 but you have re-engaged this employee. You will be able to re-engage the employee and they will be eligible to be placed on furlough and receive the grant from the scheme so long as the employee was employed and on your payroll on or before 23rd September, and an RTI submission was made to HMRC notifying payment to the employee between 20th March 2020 and 23rd September 2020.
The Coronavirus Job Retention Scheme FAQs
What does furlough mean?
Until recently, ‘furlough’ had no meaning in UK employment law. ‘Furlough’ essentially means a temporary leave of absence. The UK government have introduced ‘furlough leave’ in response to the coronavirus pandemic, so that employers can still pay their employees and retain them whilst they are not working.
Can an employee do any work at all for their employer if they have been furloughed?
Furloughed employees cannot do work for or on behalf of their employer during furlough leave. If they do, they will not qualify for the Coronavirus Job Retention Scheme. For example, if a furloughed employee is providing services or generating revenue for their employer, or a linked or associated organisation they would not be eligible for the subsidy of wages under the furlough scheme.
However, from 1st July 2020, the CJRS became more flexible. Employers are now able to bring back furloughed employees on any shift pattern and for any amount of time, while still being able to claim for their remaining normal hours not worked via the CJRS. It is still the case for flexible furloughing that Employees must not carry out work on days when they are furloughed.
Can an employee get another job whilst furloughed?
The guidance states that employees can start a new job whilst on furlough leave.
If an employee’s employment contract prevents this, their employer can refuse a request.
Can an employee carry out training or volunteer work during furlough leave?
Yes, as long as the work does not provide services to generate revenue for, or on behalf of, the company or a linked or associated organisation.
However, if you need your employee to carry out training, such as online training, while on furlough leave, you must pay them at least the National Living Wage or National Minimum Wage for the time they spend completing the training. In most cases this will be covered by the CJRS grant, however if the 80% subsidised under the CJRS is below the National Living Wage or National Minimum Wage you will need to pay the difference for any time spent training.
How much pay will my employees receive whilst on Furlough Leave?
Eligible employers will receive 80% of each furloughed workers’ basic wages or salary, up to a maximum of £2,500 per month.
The gov.uk advice suggests that an employer could choose to pay the difference between this scheme payment and the employee’s salary, but it is not mandatory that they do this.
Because this grant is a replacement for income, it is subject to normal National Insurance and Income Tax deductions. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme.
Employers will be liable to pay Employer National Insurance contributions on wages paid, as well as automatic enrolment contributions on qualifying earnings unless an employee has opted out or has ceased saving into a workplace pension scheme.
Do I need to pay my employees whilst on Furlough Leave whilst we wait for the reimbursement from the Coronavirus Job Retention Scheme?
Yes. Employees will still need to be paid (minimum 80% of wage) whilst on Furlough Leave, pending a reimbursement from the Coronavirus Job Retention Scheme.
If you are concerned that you are unable to meet these costs, employers may want to consider applying for additional Government support, such as the Coronavirus Business Interruption Loan.
What is the minimum period of time an employee can be furloughed for?
Since 1st July 2020, employees can be flexibly furloughed, and work for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.
What rights does a furloughed employee have?
A furloughed employee has the same rights as they did before they were furloughed. This includes:
- Statutory Sick Pay entitlement
- Maternity rights and other parental rights
- The right to redundancy payment
- The right not to be dismissed unfairly
My organisation receives government funding for staffing costs, can I furlough my employees?
The government has stated that organisations, (public sector and non-public that receive funding for staffing costs – and where that funding is continuing) are expected to use the money to pay staff as usual, and therefore not use the scheme.
However, partially publicly funded organisations may be eligible where their private funds have been affected.
Is the Coronavirus Job Retention Scheme relevant to my employees?
The extended scheme applies to employees who were on your PAYE payroll on 30th October 2020, or were made redundant or stopped working for your before 23rd September, but were re-engaged after 23rd September 2020. Employees do not need to have been furloughed previously on the CJRS to be eligible.
For periods starting on or after 1st May 2021, employees are eligible to be furloughed and receive the CJRS grant if they were on the payroll on 2nd March 2021 and a PAYE RTI submission to HMRC notifying payment of earnings to the employee was made between 20th March 2020 and 2nd March 2021.
This includes full time, part time, fixed term, and flexible and zero hour workers who are not working. Agency workers, including those covered by umbrella schemes are also covered by the scheme. Additionally, employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. Furlough leave is also available to office holders (including company directors) and salaried members of LLPs.
My employee is on sick leave or is self isolating – can I furlough them?
If your employee is self-isolating or on sick leave, they will be eligible for Statutory Sick Pay (in line with normal eligibility criteria). However, the government had updated their guidance to reinforce that furlough leave is not intended to be used for short term sickness absence.
Although, if an employer needs to furlough an employee for business reasons, and the employee is on sick leave, then the employer is entitled to furlough them along with other employees. Please note that the employee should no longer receive sick pay, and instead be classed as a furloughed worker.In addition, employers are entitled to furlough employees who are on long-term sick leave or are being shielded.
The government have also introduced an SSP rebate scheme where employers are able to claim back two weeks SSP for an ill employee. Please note that you can claim back from both the SSP rebate scheme and the CJRS for the same employee, but not for the same period of time. For example, you can’t claim for an employee’s sick pay for a week where you are also claiming for their wage under the CJRS. But, if an employee has not been furloughed, and they become unwell, you can claim for 2 weeks of their SSP under the SSP rebate scheme.
Read more about the Coronavirus Statutory Sick Pay Rebate Scheme in our guide:
Employers guide to the Coronavirus and sick pay
A furloughed employee has become sick, do I pay them Statutory Sick Pay?
Furloughed employees retain the same right to Statutory Sick Pay as they had before furlough leave.
Therefore, if a furloughed employee becomes unwell they must be paid at least Statutory Sick Pay. It is up to employers to decide whether they will move the employee onto SSP, but please note that you will no longer be able to claim for the furloughed salary if you do so.
If an employer does decide to move an employee to SSP, the employer must fund this payment but may be able to reclaim two weeks of SSP under the SSP rebate scheme. Employees who are identified as clinically extremely vulnerable or need to shield are eligible to be furloughed. However, if an employer decides to keep an employee on furlough leave while sick, they will be able to continue to claim the wage via the CJRS.
My employee has been identified as an extremely vulnerable person and needs to be shielded. How do I pay them?
Individuals who are shielding may be eligible for SSP. Alternatively, if they meet other furlough eligibility criteria, you can agree with them to designate them as a furloughed worker, if they are unable to work from home.
My employee wants to take furlough leave but there is work available for them – what do I do?
We advise that employers carefully follow government advice and guidance around national restrictions, business closures, social distancing, hygiene practices, and enabling working from home where possible.
Furlough leave is an agreement between employees and employers. Talk to your employee to understand their reasons for wanting to take furlough leave. For example, the employee may have new caring responsibilities, or need to shield. If this is not the case, and you have work for employees to carry out it is reasonable to request them to carry out the work, unless they are absent from work for another reason such as sickness absence, self-isolating, or holiday.
What are our responsibilities to all the employees that have already been made redundant or laid off?
This scheme enables those employees who were on the payroll on 23rd September 2020 and have been made redundant afterwards to be re-employed, and put on furlough leave. A PAYE RTI submission to HMRC notifying payment must have been made between 20th March 2020 and 23rd September 2020.
This would allow them to receive 80% of their wage from the government during this period.
The guidance goes further to say if your employee stopped working for you on or after 23rd September, you can re-employ them, then furlough them and claim for their wages via the scheme. Therefore, this would apply in a situation where an employee resigned, or was dismissed on 23rd September. In addition, an employee on a fixed term contract on the payroll on 23rd September where that contract ended after 23rd September can be re-employed and claimed for. You should be clear in these circumstances if you are treating this as continued service, or new employment.
If you have any questions about this, please do contact our team to discuss.
My employee is on National Living Wage/ National Minimum Wage? Can I still pay them 80%?
Employees are only entitled to the National Minimum Wage/National Living Wage for the hours they are working.
As they will not be working on furlough leave they can be paid 80% of their salary, even if this falls below the National Minimum Wage/National Living Wage. However, as an exception to this, please note that if you ask employees to carry out any training whilst on furlough leave, you must pay them at least the National Minimum Wage/National Living Wage for time spent training.
My employee is an Apprentice, can I furlough them? Can they carry out training whilst on furlough leave?
Apprentices can be furloughed just like other employees, and can continue to train whilst on furlough leave.
Please note that Apprentices should be paid Apprentice Minimum wage, National Minimum Wage or National Living Wage as appropriate while carrying out training during furlough leave. Therefore, employers would need to pay the difference between this wage and the amount reimbursed under the CJRS if necessary. You can find more guidance around training and learning for Apprenticeships during COVID-19 on the gov.uk website.
My employee has caring responsibilities as a result of the coronavirus pandemic – can I furlough them?
Yes, employees who are unable to work due to caring responsibilities resulting from the COVID-19 pandemic can be furloughed. For example, if your employee needs to look after their children, they can be furloughed.
My employee is on a fixed term contract – how do I furlough them?
You can furlough an employee on a fixed term contract. You can extend or renew their fixed term contract while they are on furlough leave, and still be eligible for the scheme.
However, please note, if an employee’s fixed term contract ends because it is not extended or renewed you can no longer claim the grant for them.
Can I use the scheme to pay notice periods?
No, for claims starting on or after 1st December 2020, you cannot claim for days on or after 1st December where the employee was serving contractual or statutory notice period.
What do employers need to do to access the scheme?
How do I access this support?
Employers need to designate ‘furloughed workers’ and notify them of this in line with UK employment law and their contract of employment. In compliance with employment law, you must agree with an employee to make changes to their terms and conditions of employment. This is unlikely to be problematic if the alternative is redundancy. The government guidance states that if enough numbers of staff are involved, it could be necessary to engage collective consultation processes to gain agreement to changes to terms of employment.
HMRC have stated that employers must notify employees of their furlough status in writing and this notification must be kept for five years. If you would like support with any documentation to support this process, please do get in touch with our team. You will then be able to submit the claim to HMRC via a portal on the government gateway.
How do I select employees to designate for furlough leave?
You do not need to place all of your employees on furlough. It would be prudent to approach furlough leave selection in the same way that you would approach a redundancy situation. Remember that discrimination and equality laws will apply in the usual way.
First, given our unique circumstances, you may want to consider those who would benefit most from furlough leave. For example, those groups which are most vulnerable to the virus. You could have an initial discussion with these individuals about furlough leave as an option, and many may wish to take it. Once you have selected these employees you should meet with them (this could be remotely), and mutually agree to put them on furlough leave. You should document this agreement.
In addition, you may have an obvious need to put a certain section of your workforce on furlough leave if their department has been particularly affected by the pandemic. In contrast, another department may be able to function as normal. To select employees for furlough leave, we would recommend you use a scoring process to ensure the selection is fair. Documenting this will help to protect you against discrimination or equality claims.
What do I need to know before I calculate my claim?
Before you can calculate your claim, you need to calculate your employee’s wage. With flexible furloughing, it will be more important to know the length of your claim period, what you can include when calculating wages, and your employees’ usual hours and furloughed hours.
The length of your claim period
Claims cannot overlap calendar months, and the claim period must last at least 7 days. However, you can claim for less than 7 days if you are claiming for the first or last few days of a calendar month, and you have submitted a claim for the pay period immediately before those days.
Match your claim periods to your payroll, if you can. However, this may be difficult because you can only submit one claim per period. Therefore, you need to claim for all your furloughed or flexibly furloughed employees at the same time – and they may be paid at different times.
What to include when calculating wage:
The amount you should use when calculating your claim includes regular payments you are obliged to make, such as:
- regular wages you paid to employees
- non-discretionary payments for hours worked, including overtime
- non-discretionary fees
- non-discretionary commission payments
- piece rate payments
Your employees’ usual hours and furloughed hours
There is guidance on the government website on how to do calculate usual hours for a range of situations.
This includes how to use the lookback method. Please note that for claims relating to furlough in March 2021 and April 2021, the lookback method will vary to refer to a reference salary from March 2019, and April 2019. Find out more on the gov.uk website.
What is excluded from the scheme?
You cannot claim for reimbursement of the following under the scheme:
- discretionary bonuses (including tips)
- non-compulsory commission payments
- non-cash payments
- non-monetary benefits, including taxable Benefits in Kind (such as a company car)
- salary sacrifice scheme benefits that reduce an employee’s taxable pay
- additional employer national insurance contributions because you chose to top up the employee’s wage
- pension contributions you make above the mandatory amount
When do I need to make a claim by?
Claims from 1st November 2020 must be submitted by 11:59pm 14 days after the month you’re claiming for. If this time falls on a weekend, claims should be submitted on the next working day.
| To make a claim for furlough days in | You must submit the claim by 11:59pm on |
|---|---|
| January 2020 | 15 February 2021 |
| February 2021 | 15 March 2021 |
| March 2021 | 14 April 2021 |
| April 2021 | 14 May 2021 |
| May 2021 | 14 June 2021 |
| June 2021 | 14 July 2021 |
| July 2021 | 16 August 2021 |
| August 2021 | 14 September 2021 |
| September 2021 | 14 October 2021 |
source: gov.uk
What if I need to amend a claim?
If you need to amend your claim, you should contact HMRC.
Please note, for claims relating to 1st November onwards, you can only increase your claim if you amend your claim within 28 days after the month the claim relates to. If this falls on a weekend or bank holiday, can be amended on the next working day. Please see below for upcoming dates.
| To amend a claim for | You must amend the claim by 11:59pm on |
|---|---|
| December 2020 | 28 January 2021 |
| January 2021 | 1 March 2021 |
| February 2021 | 29 March 2021 |
| March 2021 | 28 April 2021 |
| April 2021 | 28 May 2021 |
| May 2021 | 28 June 2021 |
| June 2021 | 28 July 2021 |
| July 2021 | 31 August 2021 |
| August 2021 | 28 September 2021 |
| September 2021 | 28 October 2021 |
source: gov.uk
We’ll keep this guide updated as further guidance is published, and please visit the gov.uk website for further guidance.
If you are a Client Member, our Coronavirus Template Resources Pack is available in the client member portal.
If you have any questions about managing your employees during the crisis, or would like to purchase our Coronavirus Template Resources Pack, please do get in touch with our team (office@fitzgeraldhr.co.uk or 0330 223 5253).
Don’t forget to sign up to our HR talk newsletter to receive updates.
){kind=link}