The COVID-19 Job Retention Scheme has been introduced to encourage employers to retain staff during the coronavirus crisis and avoid having to make redundancies. In this briefing, we explain what the Scheme means for affected employees. This briefing was last updated on 13 April 2020.
1. What is the COVID-19 Job Retention Scheme (Scheme)?
Under the Scheme, the Government will pay 80% of the wage costs of employees who are placed on temporary leave instead of being made redundant (known as furlough). The payments will be capped at £2,500 per month. The Scheme will cover payments between 1 March 2020 and 31 May 2020, but this may be extended. The Scheme covers employees and those with other employment statuses. For ease of reference, in this note the term "employees" is used to cover all eligible individuals.
On 26 March 2020, the Government published guidance for employers and guidance for employees (Guidance) on how the Scheme is intended to operate. The Guidance was updated on 4 April 2020 and again on 9 April 2020. This briefing was last updated on 13 April 2020.
2. Is my employer able to apply for funding under the Scheme?
The Scheme is open to any UK employer, regardless of their size or sector (including individual employers). To qualify, your employer must have a UK bank account, have created and started a PAYE payroll scheme on, or before, 28 February 2020 and have enrolled for PAYE online. If your employer receives public funding for staff costs, or to provide services necessary to the response to coronavirus, then they are not expected to apply for funding under the Scheme.
3. Will my employer be able to claim funding for me?
Not all members of the workforce are covered by the Scheme. Your employer will be able to claim funding for you provided you were on their payroll on 28 February 2020 and you do not carry out any work for them once furloughed. You must also have one of the eligible statuses listed in Table A below.
If you have more than one employer, you can be furloughed by one of your employers and continue to work for the other. Each job is treated separately, and the cap applies to each separately. Foreign nationals and employees on all categories of visa are eligible to be furloughed.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
