Has your employer mentioned financial difficulties regarding the payment of your salary?
There is now a Coronavirus Job Retention Scheme. Any employer in the country – small or large, charitable or non-profit – is eligible for the scheme. This scheme is already up and running and is currently set to last until the end of October 2020. There is currently no financial limit on the amount the government will ultimately provide to support jobs.
If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage to avoid redundancies.
This new scheme will provide for 80% of salaries to be covered via HMRC grants with effect and be backdated from 1 March 2020 for individual salaries of up to £2,500 per month (it is important to mention that it is not currently clear if that figure is before or after tax). Further, the 80% grant does not include non-monetary benefits, such as a car.
How can you access this scheme? Your employer will need to apply for the grant and designate affected employees as “Furloughed Workers” and notify you of this change and you will be kept on payroll rather than being made redundant.
From 1 July 2020, furloughed employees will be allowed to go back to work on a part time basis with the government continuing to pay 80% of wages for any of the normal hours you do no work until the end of August. Any working hours arrangement that you agree with your employer must cover at least one week and be confirmed by your employer in writing.
From August 2020, the Coronavirus Job Retention scheme will be slowly tapered.
In August, the government will continue to pay 80% of wages up to a cap of £2,500, but employers will pay the employer’s national insurance contributions and pension contributions.
In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay the employer’s national insurance contributions, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
In October, the government will pay 60% of the wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay the employer’s national insurance contributions, pension contributions and 20% of the wages to make up 80% of the total up to a cap of £2,500.
Employers are not obliged to furlough their PAYE employees.
Employers are not obliged to furlough their entire work force; they can choose to nominate part of their work force as furloughed and make the other employees redundant.
Your employer can still make you redundant after having selected you as a furloughed worker, though your redundancy rights are unaffected (click here to learn more about your redundancy rights.)
This scheme can be used for full-time or part-time employees, as well as those on zero hours and agency contracts as long as they were on the PAYE payroll before 28 February 2020.
Part-time employees can be furloughed by more than one employer (if they work for more than one employer). For example, if you work part-time for two employers, both employers can designate you as a furloughed employee and you will receive two grants which combined can be up to £2,500 per month.
The scheme also covers employees who were made redundant since 28 February 2020, but have since been rehired by that same employer.
Further, to qualify for this scheme, you should not undertake work for them while you are furloughed.