- 27th March 2020
- Posted by: Suzy Hill
- Category: Personal Tax, COVID-19 NEWS, Business News
Check if you could be covered by the Coronavirus Job Retention Scheme
If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’. Check if you are eligible below.
You could get paid 80% of your wages through the Coronavirus Job Retention Scheme, up to a monthly cap of £2,500.
You’ll still be paid at least 80% of your wages by your employer and pay taxes from your income. You cannot undertake work for your employer while on furlough. We expect the scheme to be up and running by the end of April.
Check if you’re eligible
Both you and your employer must agree to put you on furlough – so speak to your employer about whether they can claim. You cannot apply for the scheme yourself. Once agreed your employer must write to you confirming you have been furloughed to be eligible to claim.
Any UK employer with a UK bank account will be able to claim, but you must have been on your employer’s PAYE payroll on 28 February 2020. You can be on any type of contract, including a zero-hour contract or a temporary contract.
This scheme does not apply if you are self-employed or to any income from self-employment.
If you’re on sick leave or self-isolating because of coronavirus (COVID-19), speak to your employer about whether you’re eligible – you should get Statutory Sick Pay (SSP) while you are on sick leave or self-isolating, but can be furloughed after this.
If you are shielding in line with public health guidance, then you should speak to your employer about whether they plan to place staff on furlough.
The grant will start on the day you were placed on furlough and this can be backdated to 1 March.
If you’re a public sector employee
The government expects that the scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak.
Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them.
This also applies to non-public sector employers who receive public funding for staff costs. Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.
In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.
If you work for the public sector, you can get more information about how the scheme works for you from your UK Government Department, employer or, in the case of employers funded by the Scottish Government, Welsh Government or Northern Ireland Executive, through your respective administration.
If you were made redundant after 28 February
Your employer can agree to re-employ you and place you on furlough instead. They’ll still be able to claim a grant to cover 80% of your monthly earnings, up to a monthly cap of £2,500.
If you currently have more than one employer
You can be put on furlough by one employer and continue to work for another, if it is permitted within your employment contract.
If you’re put on furlough by more than one employer, you’ll receive separate payments from each employer. The 80% of your normal wage up to a £2,500 monthly cap applies to each job.
If you are on Universal Credit
If you’re earning less because you’re on furlough, your Universal Credit payment might change – find out how earnings affect your payments.
If you are on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay
You must take at least 2 weeks Maternity Leave (4 weeks if you work in a factory or workshop) immediately following the birth of your baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth and you may want to do this.
If you are eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and you will be 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 your average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of your 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.
Some employers ‘top up’ Statutory Maternity Pay and their employees are eligible for an enhanced, earnings related rate of pay. If you are eligible for enhanced (contractual) maternity pay from your employer this is included within the wage costs that your employer can claim through the scheme. The same principles apply if you qualify for contractual adoption pay, paternity pay or shared parental pay.
If you are currently pregnant and due to start Maternity Leave
You will start Maternity Leave as usual. If your earnings have reduced due to a period on furlough or statutory sick pay prior to your Maternity Leave starting this may affect your Statutory Maternity Pay. The same principle applies to contractual adoption pay, paternity pay and shared parental pay.
How much you’ll get
Your employer will get a grant to cover 80% of your monthly earnings, up to a maximum of £2,500. Firms will be eligible for the grant once you have been furloughed, from 1 March. Your employer:
- will pay you at least 80% of your usual monthly earnings, up to a maximum of £2,500, as your wage
- can claim for a minimum of 3 weeks and for up to 3 months – but this may be extended
- can choose to pay you more than the grant – but they do not have to
You’ll still pay Income Tax, National Insurance contributions and any other deductions from your wage.
If you are concerned that your employer is not paying you what you are entitled to then you should raise this with your employer in the first instance, then with Acas (Advisory, Conciliation and Arbitration Service).
How your monthly earnings are calculated
If you’ve been employed (or engaged by an employment business in the case of agency workers) for a full year, employers will claim for the higher of either:
- the amount you earned in the same month last year
- an average of your monthly earnings from the last year
If you’ve been employed for less than a year, employers will claim for an average of your monthly earnings since you started work. The same arrangements apply if your monthly pay varies such as if you are on a zero-hour contract.
If you started work in February 2020, your employer will pro-rata your earnings from that month.
Bonuses, commissions and fees are not included as part of your monthly earnings.
While you’re on furlough
Your employer will need to notify you before putting you on furlough.
Once you are on furlough you will not be able to work for your employer, but you can undertake training or volunteer subject to public health guidance, as long as you’re not:
- making money for your employer
- providing services to your employer
If workers are required to for example, complete training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.
Any activities undertaken while on furlough must be in line with the latest Public Health guidance during the COVID-19 outbreak.
Your employer can still make you redundant while you’re on furlough or afterwards.
Your rights as an employee are not affected by being on furlough, including redundancy rights.
If your employer chooses to place you on furlough, you will need to remain on furlough for a minimum of 3 weeks. However, your employer can place you on furlough more than once, and one period can follow straight after an existing furlough period, while the scheme is open. The scheme will be open for at least 3 months.
If you do not want to go on furlough
If your employer asks you to go on furlough and you refuse you may be at risk of redundancy or termination of employment, depending on the circumstances of your employer. However, this must be in line with normal redundancy rules and protections.
HMRC 26 March 2020