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Job Retention Scheme FAQs From May 2021

Business Documents

The Government’s Coronavirus Job Retention Scheme is being extended until 30th September 2021.

The new extension to the current Job Retention Scheme will now continue from 1st May 2021. Those Employees who have remained Furloughed up to 31st April 2021 will continue to be protected with no break in Furlough support.

If Employees were on your payroll on 2nd March 2021 and notified to HMRC on an RTI submission between 20th March 2020 and 2nd March 2021, then they can qualify for the scheme if you re-employ them.

Whether you are claiming for employees on the existing Job Retention Scheme or Flexible Furlough Scheme, the same rules continue to apply under the extended Scheme.

Employees must have appeared on the employer’s RTI scheme prior to the 30th October 2020 for claims up to 30th April 2021 and 2nd March 2021 for claims after 1st May 2021 and operate a UK bank account.

Neither the employer nor the employee needs to have been previously furloughed or have used the Job Retention or Flexible Furlough Schemes to be eligible to claim.

You can claim for Employees on any type of employment contract, including permanent, part-time, fixed, zero-hours, agency and flexible. Foreign Nationals can also be claimed for and you can claim furlough for Employees on all categories of visas.

There are certain rules that an Employer will need to check before they claim for Employee pay through the Job Retention Scheme.

1) The Employer had a UK PAYE Scheme started on or before 2nd March 2021.

2) The Employer has enrolled for PAYE online.

3) The Employer has included the Employees on a submitted Real Time Information (RTI) submission on or before 2ndMarch 2021.

4) The Employer has a UK Bank Account.

Mutual agreement should be reached between the Employer and Employee. The Employer should set a date when the Furlough situation will be reviewed. The Employer must write to the Employee confirming the discussion and agreement reached. The Employee can, but does not have to, sign to say that they have read and understood the change of employment terms and conditions.

Once agreement is reached, the Employer will need to submit a return to the HMRC for the hours worked by the employee (if applicable), contracted hours as per the Employee’s contract of employment and the hours being claimed for under the Job Retention Scheme. The Employer must keep these records for at least five years.

The furlough period must be for a minimum of 7 days. Aside from this period, the Employees can remain furloughed or flexibly furloughed for as long as the Employer needs them to be up to the cessation of the Scheme.

Yes. You can furlough any Employee who was on the Company’s PAYE Scheme and had been included on an RTI Submission between 20th March 2020 and 2nd March 2021 for claims made after1st May 2021 onwards.

The Governments current advice is that Employees should work from home if they can. This means that it is not a mandated right for an Employee to work from home during the lockdown period. If the business needs Employees to attend the workplace during the lockdown period, then they can request the Employee to do so as long as they have adhered to the Government’s Working Safely guidelines.

No. An Employee cannot undertake any work for the Employer during any hours where a furlough claim under the Job Retention Scheme is made. The Employee must not be involved in any activity that makes money for the Company or provides services for the Company or any organisation linked to it.

An Employee can undergo training, provided the Employer pays a minimum of National Minimum Wage for the hours spent training. They can also volunteer or work for another employer, not associated with the Company, if contractually allowed to do so.

For claims made up until 30th June 2021, the Government will reimburse Employers up to 80% of salary capped at a gross monthly amount of £2,500. This figure will be reduced accordingly by the number of hours worked if the Employee is flexibly furloughed. The Employer will be responsible for paying the Employer National Insurance and Pension Contributions.

From 1stJuly 2021, Employers will be expected to contribute 10% of the Employees’ pay and from 1st August 2021 20% of the Employees pay until the schemes ceases at the end of September 2021. These amounts are in addition to the Employer National Insurance and Pension contributions.

When working under Flexible Furlough, the Employer must pay the Employee for all hours worked.

Employees retain all of the rights that would normally apply under normal employment terms and conditions including SSP, annual leave entitlements, maternity, paternity and adoption rights, rights against unfair dismissal and redundancy payments.

As before, you will need the length of your claim period, the different elements of the wages you should include (salary, wages, non-discretionary commission and overtime etc), and the Employees’ worked and furloughed hours. You cannot claim for any discretionary payments or Benefits in Kind.

Be aware that if you miscalculate the hours worked and the employee works more or less than the claim submitted or you include discretionary payments, you will need to contact HMRC to make an adjustment. There are serious fines for not advising HMRC of any overclaims and repaying them.

As before, the rules from 1st May 2021 remain unchanged and the minimum period is 7 days at a time. The only exception to this is if you are claiming for the start or end of a month and the Employee has been furloughed during the month immediately before or after it.

Whilst an Employee could technically be allowed to be paid less than the National Minimum Wage whilst being paid 80% of their salary, the minimum rate must be paid for all hours worked by an Employee and also for any training hours carried out whilst they are on furlough.

The Employee accrues all holiday entitlement whether they are working or on furlough i.e. a minimum of 5.6 weeks, which can include Public Holidays.

If the Employees normally take the Public Holidays as leave, then the Employer will need to either top up the pay to 100% as above or give the employee the public holiday in lieu. Employers should agree in advance with the employees if they are expected to take the public holidays as holiday.

If an Employee is flexibly furloughed, then any holiday taken during this claim period should be treated as furloughed hours rather than worked hours.

If an Employee takes their holiday whilst on furlough, the Employer must top up the payment to100% of their contractual pay, which is either the employee’s normal rate of pay or 52 weeks average earnings where their pay varies.

Please be aware that an Employer cannot furlough an Employee for the sole reason that they are taking part of their annual holiday.

Employers can enforce Employees to take their annual leave whilst on furlough by giving the Employee twice the amount of notice period as the holiday period to be taken i.e. 1 week’s holiday = 2 weeks’ notice.

Employers are also able to cancel planned holiday by giving the Employee the same notice as the holiday period itself i.e. 1 week’s holiday = 1 weeks’ notice to cancel.

There is no longer any official shielding category for extremely clinical vulnerable Employees, subject to written GP confirmation to the contrary. These Employees should work from home where possible.

Furloughed Employees retain their rights to be paid Statutory Sick Pay (SSP), subject to meeting the eligibility criteria. It is up to the Employer whether to take the Employee off furlough and pay SSP or leave them on furlough at their furloughed rate.

Employees that receive SSP cannot be included on any claim under the Job Retention Scheme and the Employer is responsible for paying SSP. Employees that are self-isolating and/or suffering from symptoms of COVID-19 may be eligible for SSP from day 1. Employers may be able to claim back SSP under the COVID-19 SSP rebate scheme up to a maximum of 2 weeks.

These Employees will be entitled to SSP, subject to the eligibility criteria. The Job Retention Scheme cannot be used for covering short term sickness.

You cannot use the Job Retention Scheme to cover any redundancy notice period.

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