In addition to the extension of the CJRS to 30 June 2020, with the possibility of a further extension where lockdown measures remain in place beyond that date, on 15 April 2020, in response to lobbying to include more recent recruits, the government extended the CJRS to staff that are on the employer’s PAYE payroll on, or before, 19 March 2020 and who have been notified to HMRC via a RTI submission by that date (the previous cut-off date was 28 February 2020). This means, however, that employees who were employed on or before 19 March 2020 but who were not paid via the PAYE payroll by that date, will still be excluded from the CJRS.
Employees that were employed as of 28 February 2020 and on the PAYE payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that date and prior to 19 March 2020, can also qualify for the CJRS if the employer re-employs them and puts them on furlough. As with any decision to place the employee on furlough, there is no obligation for the employer to do so.
Claims under the CJRS can be backdated to 1st March 2020.
Employers have generally found it straightforward to submit claims via a relatively easy online claim process, although the government guidance which has been updated on a number of occasions and the legal framework behind the CJRS in the form of the Treasury Direction is less penetrable.
Users of the HMRC CJRS claim portal have found that it is easier to calculate the figures in advance, so that these can be inputted into the 3 fields for the 80% wage calculation, the employer’s National Insurance Contribution and the employer’s auto enrolment pension contribution figure.
Details of the information needed to make a claim can be found here: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
A step-by-step guide to making a claim is available here: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers
FSB members may adapt our template Letter to Employee Assigning them to Furlough, which is available on the FSB Legal Hub. Members should also refer to the factsheet on Furlough on the FSB Legal Hub which is regularly updated in accordance with changes in the government guidance.
Employees who cannot be furloughed
Certain categories of employees cannot be furloughed under the CJRS. These include:
1. Employees working on reduced hours or for reduced pay. The CJRS only applies to employees who have been instructed by the employer, for a minimum period of 21 days, to cease all work in relation to their employment for a reason related to the coronavirus epidemic (and where the employer and employee have agreed in writing (which may be by email also) that the employee will cease all work in relation to their employment).
2. Employees hired after 19 March 2020 and employees hired before that date who have not been notified to HMRC on an RTI submission (which generally means they would need to have been paid by 19 March 2020).
3. Employees who are not paid through the PAYE payroll, which will include those employees whose earnings are below the Lower Earnings Limit, which is currently £120 per week and the self-employed.
4. Employees who are receiving Statutory Sick Pay (SSP). The government guidance says that employers can choose to furlough employees for business reasons who are currently off sick and pay them furloughed wages instead of SSP. The Treasury Direction however appears to contradict this, stating that employees who are on sick leave cannot be furloughed until the end of their sickness period. The Government guidance states that employees who are shielding in line with public health guidance can be placed on furlough leave. There is still some uncertainty however as the SSP Regulations were extended on 16 April 2020, bringing shielding employees within their scope, meaning that it is not clear whether those employees should receive SSP instead of furloughed wages. We await further guidance on this. However, it appears at least that employees who were already placed on furlough and shielding prior to the extension of SSP on 16 April 2020 to employees who are shielding, can continue on furlough and receive furloughed wages.
5. Employees who receive public funded pay. The Treasury Direction which sets out the legal framework for the CJRS is silent regarding the restrictions on claiming for employees whose wages are publically funded. However, government guidance states that the government “expects” that only in a small number cases will the CJRS be appropriate for use by public authorities; for example where organisations (and their employee costs) are not funded by the government and whose staff cannot be redeployed to assist with the coronavirus response. This also applies to non-public sector employers who receive partial or total public funding for staff costs.
On 17 April 2020 the government published guidance for early years’ child care providers who are employers (such as nursery schools) in relation to claiming under the CJRS where they receive early years’ public funding which pays part or all of staff salaries, which is available here: https://www.gov.uk/government/publications/coronavirus-covid-19-financial-support-for-education-early-years-and-childrens-social-care/coronavirus-covid-19-financial-support-for-education-early-years-and-childrens-social-care
This guidance states that those childcare providers can only furlough staff and claim through the CJRS where they meet certain conditions and can only claim in respect of the proportion of the paybill which is privately funded (e.g. through the fees parents pay for childcare beyond the free entitlements, rather than funded through the government’s free entitlements).
Are you aware that FSB members can book a call with a solicitor, tax or cyber expert through the FSB Legal Hub? Log in to the FSB website and click on Legal Hub – then click on Book a call and follow the steps. Here’s the link: https://www.fsblegalhub.co.uk/fsb/lets-talk