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The Coronavirus Job Retention Scheme: New details of scheme announced

On 20 March 2020 the Government, announced a raft of rescue measures for UK businesses, collectively referred to as the Coronavirus Job Retention…

On 20 March 2020 the Chancellor Rishi Sunak, announced a raft of rescue measures for UK businesses, collectively referred to as the Coronavirus Job Retention Scheme (CJRS).

By far the most important measure for employers was the government’s promise to fund 80% of wage costs for any employee who would otherwise have been “laid-off” due to coronavirus, up to a cap of £2,500 per month. The new scheme describes any employee for whom this funding is claimed as placed on “furlough leave” or as being “furloughed”.

However, there has so far been very little detail available to back-up this pledge and to help employers decide how to go about implementing furlough leave in practice. Thankfully however, new and more detailed advice on the scheme was published on 26 March 2020.

The detail

The key features of the scheme for claiming employee wage costs through the CJRS are as follows:

  • Employers will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses should not be included.
  • Any “UK organisation with employees” can apply including businesses; charities; recruitment agencies (where agency workers are paid through PAYE); and public authorities. However, some important caveats apply to public authorities.
  • Employees (whether part-time or full-time), agency workers and even zero-hours staff are covered by the scheme.
  • The furlough period must be a minimum of three weeks long.
  • To be eligible for furlough leave, employees must have been added to your payroll no later than 28 February 2020. This means that you cannot use furlough leave or claim funding for recent or imminent starters (even if you have no work for them to do)
  • However, any employees made redundant since 28 February 2020 can be re-hired by their employer and placed immediately onto furlough leave. We presume, although it is not explicitly stated in the guidance, that employees currently on a period of ‘lay-off’ can now be placed on furlough leave also.
  • Employees who are on sick leave (including self-isolation in line with government guidance) continue to be eligible for Statutory Sick Pay (SSP) but can be placed on furlough leave after their absence.
  • Where an employee is on, or plans to take, Maternity Leave, the normal rules apply and they remain entitled to 39 weeks of statutory maternity pay or maternity allowance. This should be paid at the normal statutory rates. Any enhanced contractual maternity pay you provide can be claimed back as wage costs through the scheme. The same principles apply where an employee qualifies for contractual adoption, paternity or shared parental pay.
  • If employees have more than one job, they can be placed on furlough leave by each employer. Each employer may separately make a claim for funding, up to the £2,500 cap.

What does this mean for me?

The funding scheme is in many ways broader than anticipated. The tone and phrasing of previous government guidance had suggested that only employees would be covered. The extension of the scheme to agency and zero-hours workers is surprising and generous, given that employers are generally able to release employees engaged in these ways relatively quickly and easily.

We know that the most urgent question for many of our clients is how the funding mechanism will work in practice. Will employers be required to pay wages upfront (and evidence what they have spent in order to claim)? Or does the scheme allow employers to claim for wages that it was unable to pay, or which fall due for payment in the near future? Unfortunately, this is still not completely clear. The guidance does not specifically state that payment must be made by an employer before HMRC will release funds, and seems to suggest that claims can be made for imminent payment of salary (allowing employers to wait until funds are received before making payment to staff). Further specific guidance is anticipated before the payment portal goes ‘live’ shortly.

There has also been some confusion over whether the funding scheme would apply to the public sector. The guidance confirms that public sector employers are eligible. However, the government expects that the scheme will not be used by many public sector organisations, as most are required to remain operational and continue to provide public services. Where employers currently receive public funding for staff costs (whether or not these costs are expressly related to the coronavirus response) the guidance makes clear that these staff should not be furloughed.

Many of you will disappointed that furlough leave cannot be used for very recent or new starters. However, this is understood to be an anti-fraud measure, to prevent employers from making ‘sham’ hires simply to access funding.

The guidance reiterates that furloughed employees must not carry out any work for you while they are on furlough leave. You will therefore need to think carefully about your business continuity requirements before placing employees on furlough. However, the guidance suggests that an employee can “take part in volunteer work or training” as long as they are not providing services or generating revenue for your organisation. If you require employees to undertake, for example, online training courses while on furlough, the guidance makes clear that they must be paid for this (even if this comes to more than the 80% of their wage that will be subsidised).


This new detailed guidance is very welcome and will enable employers to move forward with a bit more confidence.

However, we know from conversations with our clients since the CJRS was announced that there are still a huge number of unanswered questions. This is understandable, as employment policy that would normally take months or even years to develop has been rolled out by the government at incredible speed.

Employers in the public sector may find it especially difficult to determine which, if any, of their staff will be eligible for furlough leave. If you are unsure we would be happy to advise you.

Please do continue to contact us with your questions about the scheme and let us know any problems you encounter when implanting furlough leave in your organisation or attempting to access the government funding scheme.

Ben Daniel  is Head of Employment, Pensions and Immigration at Weightmans LLP. If you have any questions or concerns please do not hesitate to contact Ben at or speak to your usual Weightmans advisor.

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