On 23 April and 27 April 2020 the government published updated guidance:
- Government CJRS guidance for employers
- Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme
- Claim for wages through the Coronavirus Job Retention Scheme - access to Gateway
The most important clarifications to note from the latest guidance are as follows:
Employees made redundant or who stopped working for employer on or after 19 March 2020 – the guidance provides clarity that employees who started work for their employer on or before 19 March 2020 (and meet the real time information ("RTI") eligibility criteria with regard to being on the PAYE payroll as at 19 March) but who were made redundant or stopped working for the employer on or after 19 March 2020, can be re-employed and placed on furlough.
Fixed-term contracts – the section of the guidance on fixed-term contracts has been re-drafted. An employee on a fixed term contract can be re-employed, furloughed and claimed for under the CJRS if either:
- their contract expired after 28 February 2020 and an RTI payment submission for the employee was notified to HMRC on or before 28 February 2020.
- their contract expired after 19 March 2020 and an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020.
If the employee’s fixed term contract has not already expired, it can be extended or renewed. Employees that started and ended the same contract between 28 February 2020 and 19 March 2020 will not qualify for the CJRS.
Prior to this amendment there were conflicts within the guidance on exactly when a fixed term contract employee could be re-employed and furloughed.
Trade union agreement – under the "agreeing to furlough employees" section, the employer guidance now states that a collective agreement reached between an employer and a trade union is acceptable for the purpose of a claim under the CJRS. However, there is still uncertainty as the Treasury Direction requires an agreement in writing between the employer and employee that all work will cease during furlough. Whilst the position is uncertain and as the Treasury Direction is legal in nature, we would advise employers to seek written confirmation from employees. Although it would seem unfair for an employers' claim to be excluded from the CJRS when the employer has followed the guidance, the safest approach is to seek written confirmation. Employers should take specific legal advice when seeking to agree to a furlough arrangement with a trade union.
Claim period – further guidance is given on determining the claim period: "It is for you to decide the length of your claim period. In deciding what your claim period is, you should think about how frequently you run your payroll. The length of claim period will be different for different employers". The guidance goes on to state "You cannot make more than one claim during a claim period - this means you should include all of the employees that you want to furlough for that claim period, because you will not be able to make another claim for the same period or one that overlaps". With regard to amending a claim the guidance clarifies that a claim cannot be amended once submitted, however HMRC is seeking to develop a process to allow for amendments to be made. Considering the complexity and shifting nature of the guidance, the ability to amend a claim would be welcomed.
Parental leave pay (statutory maternity pay, maternity allowance and other parental payments) - In a press release on 24 April 2020 the government confirmed that furloughed workers planning to take paid parental or adoption leave are entitled to pay based on their usual earnings rather than a furloughed pay rate. The amending regulations apply where the first day of the period in which the relevant payment or allowance is payable is on or after 25 April 2020. The aim of the new regulations is to ensure that employees about to take family-related leave will not be penalised by being furloughed.
As more claims are submitted to the CJRS and as HMRC contends with the mechanics of the scheme, it is unsurprising that we will see amendments to the guidance. The government has had to develop the CJRS in an incredibly short timescale, we will keep you updated on further amendments.
If you would like any further information with regard to the issues raised in this update please contact your usual DWF contact or another member of the Employment Team.
Government CJRS guidance for employers
Government CJRS guidance for employees
The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction
Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme
Government step by step guide on CJRS for employers
Claim for wages through the Coronavirus Job Retention Scheme - access to Gateway
Acas Coronavirus (COVID-19): advice for employers and employees
Pensions Regulator Guidance
DWF Legal Update on the CJRS guidance on 26 March 2020
DWF Legal Update on the CJRS updated guidance on 4 April 2020
DWF Legal Update on the CJRS updated guidance on 9 April 2020
DWF Legal Update on the CJRS updated guidance on 15 April 2020
DWF Legal Update on Treasury Direction
DWF Legal Update on the CJRS updated guidance on 17 April 2020