PROTECT – YOUR JOB!
The government’s Coronavirus Job Retention Scheme (CJRS) is designed to help employers if they cannot cover staff costs due to coronavirus. Its aim is to avoid redundancies, and the scheme can offer grants of up to 80% of an employee’s wage for all employment costs, up to a cap of £2,500 per month. The scheme will cover salaries from March 1, 2020 – you must have been on your employer’s PAYE payroll on the 17th March 2020. The Scheme will run until October 2020 although there will be changes as it progresses.
If the business you work for applies for CJRS, they will designate some or all of their employees as ‘furloughed workers,’ and will need to notify employees of this change. You will still need to consent to being furloughed. They will have to submit information through an HMRC portal to apply for reimbursement.
However, changing the status of employees when applying for CJRS remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
If your employer tries to change the terms of your contract or any other status of your employment while designating you a ‘furloughed worker’ you should get advice.
Changes to the CJRS Scheme
The Government announced a number of changes to the scheme in late May.
- The scheme would close to employees who had not been furloughed on the 10th June – if you are currently furloughed the scheme would continue
- From the 1st July you’ll be able to go back and do some work for your employer part-time and still be covered under the CJS. we are still awaiting on additional guidance and will update these pages once this is clear
What does it mean if I am designated a ‘furloughed worker’?
This would mean that you are kept on your employer’s payroll, rather than being made redundant. You should not undertake work for them while you are furloughed.
Your employer will claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month. You will remain employed while furloughed but you should not be undertaking work. Your employer could choose to fund the differences between this payment and your salary, but does not have to. The minimum period that you can be furloughed is three weeks – although this can be renewed whilst the scheme is on-going.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
Will I have to pay tax on income from CJRS?
Yes – individuals will pay Income Tax and National Insurance on any payments received through this scheme as they are replacement for income in line with normal practise for benefits or grants that replace income.
Will this cover the cost of employer National Insurance contributions and employer pension contributions?
Yes – employers will be able to apply for a grant to cover the Employer National Insurance contributions and minimum automatic enrolment pension contributions on paying the lower of 80% of regular salary or £2,500 per month.
What businesses are eligible for this scheme?
All UK businesses are eligible, this includes:
- recruitment agencies (agency workers paid through PAYE)
- public authorities
The scheme is open to all UK employers that have created and started a PAYE payroll scheme on/before 19 March 2020 and have a UK bank account.
What workers are covered by this scheme?
The CJRS definitely applies to anyone employed through the PAYE system regardless of their employment contract, this can mean salaried employees, those on flexible or zero-hours contracts and agency workers. The scheme can cover part time or full time staff.
The scheme does not apply to self-employed people or contractors – see the section below for the support to self employed.
How will this work for those on zero-hour/flexible contracts/agency workers?
This scheme aims to support all those employed through the PAYE system regardless of their employment contract, including those on zero-hour contracts.
Zero-hour and flexible contracts can cover a whole range of working arrangements, and the 80% grant is applied to whichever is higher:
- The earnings in the same pay period in the previous year; or
- The average earnings in the whole previous 12 months (or fewer if they have worked for less time than this, including a part month calculation if they were taken in February).
Can I be furloughed for a short period of time, e.g. a week or a couple of days, and then re-employed?
A worker must be furloughed for a minimum of 3 weeks for their employer to be eligible to claim under this scheme. This is consistent with the public health guidance seeking to minimise the number of people outside of their homes on a regular basis.
The scheme supports employers asking the maximum number of employees to remain at home during the coronavirus outbreak. · A clear minimum period also aids a clear definition of who is and who is not furloughed.
Can a business furlough someone after hearing the announcement and then claim back to March 1st even though they had been working that whole time?
No – the scheme is backdated to March 1st with a view to covering those who have already been made redundant as a result of the coronavirus.
What if I have already been made redundant?
The scheme will be back dated to March 1 with a view to covering those who have already been made redundant due to the Coronavirus outbreak. If firms re-employ staff made redundant after March 1st, they are eligible to then be furloughed and the employer would qualify for the grant.
If you have been made redundant and your employer has not offered to reinstate you and designate you a furloughed worker, you should get legal advice.
What about if I started a job after 1 March?
Workers taken on after March 1 are excluded from the scheme.
Can my employer sack me while I’m on furlough? Is my employer allowed to sack me as soon as the furlough scheme comes to an end?
Yes, you can still be made redundant while on furlough or immediately after. There is no requirement to bring the employee back to work after the period of furlough. If an employee is made redundant during the period of furlough then grant payments will cease.
However, in both cases normal redundancy rules and protections will apply. Where a business feels that redundancy is the only option, this must still follow the rules which include giving a notice period and consulting staff before a final decision is reached. More information on redundancy can be found here.
If the CJRS is deemed a reasonable alternative to dismissal, there could be grounds for an unfair dismissal case, but again, this remains unclear for the time being.
If you have been made redundant after March 1, 2020 you should legal advice.
My employer has reduced my hours but has not designated me a ‘furloughed worker’, does this scheme apply to me?
No, if you are still undertaking work for your employer – even if your hours are reduced – you are not eligible for the CJRS scheme. If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
I am on Statutory Sick Pay, can my employer change me to a ‘furloughed worker’?
Employees on sick leave or self-isolating should get Statutory Sick Pay, but can be furloughed after this. Employees who are shielding in line with public health guidance can be placed on furlough.
If your employer currently has you on SSP, there is no reason you should not be moved to ‘furloughed’ status. If your employer does not approach you about designating you a ‘furloughed worker’ ask them about the scheme and your applicability,
I have more than one job, how does that work?
If you have more than one job, you can be furloughed by one or more of your employers. Each job is separate, and the cap applies to each employer individually.
How will my employer decide which workers to furlough?
This is a difficult question, it is essentially up to your employer which employees are furloughed and which continue working. Any decision to furlough a worker must be consented to by the worker, and equality and discrimination laws still apply to any decisions your employer is making.
Can I make my employer furlough me?
Your employer doesn’t have to furlough you, but you can ask them why they’ve said no and ask if they’ll change their decision. Check if they’ve seen the guidance for employers on GOV.UK. It explains who can be furloughed under the rules of the scheme.
If you look after someone and can’t be furloughed, you can check what to do if you need to be off work to care for someone.
If you feel that the decision to furlough certain workers and not others did not comply with equality and discrimination laws, you should get legal advice.
I am on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay, does this apply to me?
Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth.
If you are eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and you are entitled to claim up to 39 weeks of statutory pay or allowance.
If you qualify for SMP, you will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020.
If your employer offers you enhanced (earnings related) contractual pay on Maternity Leave, this is included as wage costs that you can claim through the scheme. The same principles apply if you qualify for contractual adoption, paternity or shared parental pay.
Can I help if I am Self -Employed?
If your business has been affected by coronavirus you might be able to get money from the government, for example if you’ve:
- lost out on income
- had to stop working to look after someoneIf you’re eligible, you can get money to cover lost income for 3 months.
- You won’t have to pay the money back, but you’ll have to pay tax on it.
- You could get 80% of your average profits up to a maximum of £2,500 per month from the government. This is called the Self-employment Income Support Scheme..
Check if you can use the Self-employment Income Support Scheme
You can use the scheme if you’re self-employed or a member of a partnership.
Your self-employed profits must not be more than £50,000 per year and they must make up at least half of your total income. The government will look at your tax returns to see if you’re eligible – if you’re not sure you can check the rules on GOV.UK.
You’ll also have to have been affected by coronavirus – you won’t need to give evidence of this when you apply
- have submitted your tax return for at least 1 of these tax years: 2016-17, 2017-18 or 2018-19
- have earned self-employed income in the tax years 2018-19 and 2019-20
- be planning to trade in the tax year 2020-21
- You can find out more about the scheme rules on GOV.UK
How much will I get and how do I make a claim?
HMRC will calculate how much you should get based on your self-employed profits. You’ll get 1 payment to cover the whole length of the scheme. You can apply for the scheme on GOV.UK. If HMRC accept your application, they say they’ll pay you within 6 working days.
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