The Coronavirus Job Retention Scheme (furlough leave) is intended to support employers to continue paying employees who would otherwise be made redundant or put on a period of lay-off. It is open to all employers.
Under the Coronavirus Job Retention Scheme, if a worker is designated as a “furloughed worker”, a grant will be available from HM Customs and Revenue (HMRC) to reimburse the employer for 80% of the wage costs relating to the worker, up to a maximum of £2,500 per month. Payments can be backdated to 1st March 2020.
- The worker should not perform any work for the employer while on “furlough leave”.
- The employer will need to obtain the worker’s agreement in writing to be placed on furlough leave. This is unlikely to present an issue in most situations, if the employee is aware that the alternative is redundancy or a period without pay.
In its guidance for employees, the Government states that employers do not have to top up the worker’s wages so they are paid in full, but can choose to do so, if they wish.
The Chancellor stated on 20 March 2020 that the system for administering reimbursements is expected to be in operation “within weeks”. Further details of how the scheme will operate are expected in due course.
The scheme will initially be open for three months but may be extended.
If you would like to discuss this topic in more detail or would like more information, contact Ramshaw HR today.
