Covid-19 Coronavirus Job Retention Scheme: The Headlines
Disclaimer: The Coronavirus Job Retention Scheme information in this article is intended for general information only and reflects the position in the law at the date of publication. It does not constitute legal advice and should not be treated or relied upon as such. It is provided without any representations or warranties, express or implied.
On the 20th March 2020 the Chancellor announced the introduction of a ‘Job Retention Scheme’ with the aim of trying to enable employers to retain staff members, as an alternative to making them redundant. The scheme is one of several economic packages which have been introduced recently in an attempt to try and “prop up” UK businesses amidst extremely high levels of economic uncertainty.
The purpose of this article is to summarise the key headlines and details of the scheme, based upon the information which has been provided by the government so far.
What is it?
The Coronavirus Job Retention Scheme will be a government grant – to reimburse employers for 80% of furloughed workers wage costs, to a cap of £2,500 per month.
The latest guidance states that employers can choose to top-up pay, either for the unfunded 20% of pay or the amount above £2,500 for higher earners, but this will not be a formal requirement to obtain access to the scheme. Furthermore, the scheme will be:
- Backdated to March 1st
- Open initially for at least three months but extended ‘for longer if necessary’.
Eligibility
Government guidance states that all UK businesses are eligible for the scheme.
Total funding pot available
The chancellor stated in his speech that he was placing “no limit” on the amount of funding available for the scheme.
Total funding pot available
The chancellor stated in his speech that he was placing “no limit” on the amount of funding available for the scheme.
Scheme administration
Coronavirus Job Retention Scheme (CRJS) will be administered by HMRC. Employers will need to:
- Designate affected employees as ‘furloughed workers’ (see further below)
- Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
The grant is a reimbursement to the employer therefore the employer will make the wage/ salary payment to the furloughed worker and will then be reimbursed by HMRC. The system for implementing these payments has yet to be confirmed.
When will the scheme be live?
No set date has been announced yet. The Gov.uk website states that: “HMRC are working night and day to get the unprecedented Coronavirus Job Retention Scheme up and running and we expect the first grants to be paid within weeks.”
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