25 March 2020 by Crystal HR & Payroll Ltd
Coronavirus Job Retention Scheme – information only
The Government has announced under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
How the scheme works
If you’re an employer, who can’t cover staff costs due to coronavirus and as such have asked your employees to stop working, but haven’t made them redundant, then you can apply to HMRC to help pay their salaries.
The Government will cover 80% of salaries, up to £2,500 per month, the scheme will run for at least three months, from 1 March 2020 but may be extended.
What are furloughed employees?
Furlough leave has been introduced by the Government during the coronavirus pandemic and is leave offered to employees, which keeps them on the payroll without them working. As the furloughed employees are kept on the payroll, this is different to being laid off without pay or being made redundant.
Employees who get furloughed must not work during the period of furlough but usually will return to their job afterwards unless redundancies follow.
Furloughed employees is the classification for the employees that you are keeping on your payroll, rather than laying them off.
Which employees can be furloughed?
Employees who agree to being furloughed are those working, that you would otherwise have to dismiss as redundant or lay off part or all of your workforce.
This will not cover zero-hour contracts or casual workers, unless they work on the PAYE system.
How will HMRC reimburse payments?
HMRC are working urgently to set up a system for reimbursement, as their existing systems aren’t set up to facilitate these payments yet.
We’re liaising with HMRC and you can be sure that we’ll help you with this process, and we’ll let you know as soon as we have more information.