Coronavirus Job Retention Scheme (CJRS) phase 1 frequently asked questions

The CIPP's Policy team will endeavour to update this information as frequently as possible, but our News Online pages contain the latest on government measures in response to the coronavirus outbreak.

Last updated 22/05/2020.

COVID-19 is a new illness that can affect an individual’s lungs and airways. It is caused by a virus called Coronavirus, and is currently sweeping across the world.

In response to this threat, and in order to support employers and their employees, the government have brought in temporary measures that will be implemented to help the UK through the pandemic. One such measure is the Coronavirus Job Retention Scheme.

The Coronavirus Job Retention Scheme will allow employers to reclaim 80% of the salaries of any employees who have been reclassified as ‘furloughed’ workers, up to a cap of £2,500 per month. This will be paid in the form of a grant provided by the government.

The definition of the term furlough is ‘leave of absence’, and is a widespread practice within the USA, but largely unheard of (until very recently) in terms of UK employment law. Employers must discuss the fact that employees are being furloughed with any impacted staff members, and must produce a letter, which they should keep a record of.

Please remember that, as the coronavirus situation evolves, as does the guidance for both employers and employees. Remember to continuously monitor the government information to ensure that you are up to date with the latest developments.

Check if your employer can use the Coronavirus Job Retention Scheme

Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme

Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme

Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme

Examples for 'Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme'

Claim for wages through the Coronavirus Job Retention Scheme

Reporting employees' wages to HMRC when you've claimed through the Coronavirus Job Retention Scheme


Are any individuals not classified as employees eligible for the scheme?

The Coronavirus Job Retention Scheme is also open to any of the following individuals, on the proviso that they are paid via PAYE:

  • Office holders (including company directors)
  • Salaried members of Limited Liability Partnerships (LLPs)
  • Agency workers (including employees of umbrella companies)
  • Limb (b) workers

Are employees on fixed-term contracts eligible?

If an employee is on a fixed-term contract then they can be re-employed, placed on furlough and claimed for if either their contract expired after 28 February 2020 and they were included on an RTI submission on or before that date, or if their contract expired after 19 March 2020 and they were included on an RTI submission on or before that date.

If an employee’s fixed-term contract has not expired then it can be extended or renewed, and they an be claimed for if an RTI submission was made that included them on, or prior to, 19 March 2020.

If an employee started and ended the same contract between 28 February 2020 and 19 March 2020 then, unfortunately, they would not qualify for the CJRS. This does not apply exclusively to fixed-term contracts but also to all other contracts.

Are employees who were made redundant eligible?

Employees who were made redundant, or who stopped working for their employer after 28 February 2020, and were rehired by their employer are eligible for the scheme, even if they were not re-employed until after 19 March 2020. The employee needs to have been on payroll as at 28 February 2020 and included on a Real Time Information (RTI) submission to HMRC on, or before, 28 February 2020.

Can a furloughed worker complete any work?

A furloughed worker must not complete any work for their employer during the period in which they are placed on furlough. Their eligibility to the scheme is not compromised by completing any volunteer work or training.

If an employee is placed on reduced hours, but is still performing work for their employer, then they are not eligible for the Coronavirus Job Retention Scheme.

Directors who are placed on furlough are able to carry out specific duties to fulfill any statutory obligations they owe to their company.  Directors should take extra care to ensure that they do not perform work they would carry out ordinarily, which would generate commercial revenue or provide services to, or on behalf of, their company, as this would render them ineligible for the Scheme.

Can administrators access the Coronavirus Job Retention Scheme?

If a company is taken under the management of an administrator, that administrator will be granted access to the Coronavirus Job Retention Scheme. It would be expected that administrators would only attempt to use the Scheme if they were potentially going to rehire the workers, e.g. as a result of an administration and pursuit of a sale of a business.

Can an employer pay furloughed workers more than the 80%, or £2,500 cap if they wish?

Employers may choose to top up their employee’s pay, but employer NI contributions and automatic enrolment contributions on any additional top-up salary will not be funded through this scheme. Any voluntary automatic enrolment contributions above the minimum employer contribution of 3% of qualifying earnings will also not be covered.

Can employees on Sick Pay be furloughed?

Employees who are on sick leave, self-isolating or shielding as a result of coronavirus are entitled to Statutory Sick Pay (SSP), as long as they meet other eligibility requirements.  SSP is payable from day one as opposed to day four of absence for employees absent due to COVID-19.

Employers have the option to furlough employees who are off sick but must remember that the minimum period of furlough is three weeks. Employees who are on furlough are not entitled to sick pay for the period they are placed on furlough.

Employers may also place individuals who are on long-term sick or are shielding on furlough.

If an employee becomes sick whilst furloughed, they retain their statutory rights, including the right to SSP. Furloughed employees who become ill must therefore be paid at least the rate of SSP.   If a furloughed employee who becomes sick starts to receive SSP then the employer can no longer claim for their furloughed salary.  

Full or part time employees reurning to work after a period of receiving sick pay who are placed on furlough should have the grant calculated against their salary, before tax, and not the pay they received whilst off sick.

Employees who receive variable pay and are furloughed upon return to work after a period of sick leave should have the grant calculated against either the same month's earnings from the previous year or the average monthly earnings for tax year 2019-20.

Can employees on unpaid leave be furloughed?

Employees on unpaid leave cannot be furloughed, unless that unpaid leave commenced after 28 February 2020.

Employees who went on unpaid leave on or before 28 February 2020 cannot be furloughed until the date on which it was agreed that they would return from the period of unpaid leave.

For employees who have been on unpaid sabbatical or unpaid leave, employers will need to use the amount they would have been paid if they were on paid leave when calculating 80% of their wages.

Can individuals place employees on furlough?

If HMRC has received an RTI (Real Time Information) submission notifying them of a payment in respect of the employee(s) on or before 19 March 2020, individuals can furlough employees who are paid via PAYE (this includes nannies.)

Do furloughed employees retain any of their employment rights?

A furloughed employee will retain all of the employment rights they had prior to being furloughed. That includes holiday accrual, SSP entitlement, maternity rights, rights against unfair dismissal and to redundancy payments.

How does an employer place an employee on furlough?

Employers must discuss the fact that they are placing employees on furlough with the impacted individuals and amend associated employment contracts.

If an employee does not want to be placed on furlough, and refuses their employer’s request, they are at risk of redundancy or termination of employment, subject to standard redundancy rules and protections.

Employers must write to the relevant employees to confirm that they have been furloughed, and need to retain this written record for five years. There is no requirement for the employee to provide a written response.

How does furlough work for employees on maternity leave, adoption leave, paternity leave and shared parental leave?

The normal rules for maternity leave, adoption leave, paternity leave and shared parental leave apply, but employers can claim through the scheme for any enhanced contractual pay for employees who qualify for maternity pay, adoption pay, paternity pay or shared parental pay.

On 24 April 2020, the government announced that, for any furloughed individuals taking a period of family related leave commencing on 25 April 2020 onwards, their entitlement to statutory pay would be based on their normal earnings, and not the earnings they received while placed on furlough (e.g. 80%, up to a maximum cap of £2,500 per month). This is to ensure that furloughed employees taking a period of family related leave are not penalised. This applies to Statutory Maternity Pay (SMP), Statutory Paternity Pay (SPP), Statutory Adoption Pay (SAP), Shared Parental Pay (ShPP) and Stautory Parental Bereavement Pay (SPBP).

Employees who are furloughed on return from family related statutory leave, and are  employed on a either full time or part time basis should have the grant calculated against their salary, before tax, and not on the pay received while on family statutory leave. This is in alignment with other employees who are furloughed.

If an employee whose pay varies is furloughed on return from statutory leave, the grant should be calculated using either the same month's earnings from the previous year or the average monthly earnings for tax year 2019-20.

How does holiday pay and leave work for employees placed on furlough?

Furloughed employees continue to accrue leave as per their employment contract.

Furloughed employees can take holiday whilst on furlough but they must be paid at their normal rate of pay, or where their pay varies, it must be calculated on the basis of the average pay received in the previous 52 working weeks. Employers must pay the additional amounts over the grant out to employees.

Where employees usually work bank holidays an employer can agree that this is included in their grant payment, and if employees would normally take the bank holiday as leave then their employer would have to top up their pay to their standard holiday pay amount, or allow the employee to take a day of holiday in lieu.

How does the Coronavirus Job Retention Scheme interact with payroll consolidation?

Where all employees from multiple PAYE schemes under a group of companies are transferred into one new consolidated PAYE scheme after 19 March 2020, the new scheme will have the option to furlough these employees and claim through the Coronavirus Job Retention Scheme.

How does the Coronavirus Job Retention Scheme interact with TUPE?

New employers can claim under the Coronavirus Job Retention Scheme in relation to employees of a previous business transferred after 19 March 2020 if either the TUPE or business succession rules apply to the change in ownership.

How does the National Living Wage/National Minimum Wage (NMW) interact with paying furloughed workers?

As employers are only required to pay 80% of a furloughed worker’s normal pay to them, this could bring the person’s pay below NMW levels. NMW legislation is only applicable to time that a person has worked, however they must not carry out work for the employer when on furlough and so NMW rates do not apply.

If, however, the employee worked any hours prior to being furloughed, or completes any training courses during this time, they must be paid at least the NMW for those hours.

The same applies for apprentices – they must be paid at the Apprenticeship Minimum Wage (AMW) rate for any training they undertake whilst on furlough.

How long will the scheme be in place for?

The scheme is available from 1 March 2020, and was due to be for a period of three months initially, but Chancellor, Rishi Sunak,  announced that the scheme would be extended until the end of June 2020, covering a period of four months. 

On 12 May 2020, the Chancellor announced that the scheme would be extended further, and would, in fact, be in place until the end of October 2020. It will remain at 80% of employee earnings up to a cap of £2,500 until the end of July. From August, there will be more flexibility and some employers will be allowed to bring back furloughed workers on a part-time basis. Businesses will be asked to start sharing the cost of the scheme at this point.

Is there a minimum claim period?

The minimum time an employee can be placed on furlough for is three consecutive weeks and this is the minimum period that an employer can claim for.

When employees return to work, they must be taken off furlough.

Employees can be furloughed multiple times but each period needs to adhere to the three week minimum.

Is this available for the self-employed?

The Coronavirus Job Retention Scheme is for the following employees:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

The Self-employed Income Support Scheme was revealed on 26 March that will support the majority of self-employed individuals.

What calculation should I use?

Full time and part time employees: The claim should be made for 80% of the employee’s salary as in their last pay period prior to 19 March 2020. If, on the basis of previous guidance, claims have been calculated based on the employee’s salary as of 28 February 2020 then this calculation can still be used for the first claim, if it differs from the salary paid in the last pay period prior to 19 March 2020.

Employees with variable pay: Where an employee has been employed for a full 12 months prior to the claim, employers should use the higher of either the same month’s earnings from the previous year, or the average monthly earnings from tax year 2019-20.

If an employee has less than a year’s service, employers can claim for the average of their monthly earnings since they started work.

There is HMRC guidance available on how to calculate 80% of employee wages, and the Employer's National Insurance (NI) and pension contributions for reclaim. There are also a range of examples to help with this.


What earnings should I include to establish the 80%?

You should include 80% of regular payments that you are obliged to pay your employees. This is inclusive of wages, past overtime, fees and any compulsory commission payments.

It has been confirmed that discretionary bonuses (including tips), commission and non-cash payments should not be included.

What if an employee has more than one job?

An employee can be placed on furlough by one employer but continue to carry out work for another, if this is permitted within their employment contracts.

If an employee is placed on furlough by more than one employer, they will be eligible for separate payments from each employer.

When will the scheme be ready?

A portal will be established so that employers can make their claims to HMRC. The portal has been available since 20 April 2020, and can be accessed here.

HMRC will pay the reimbursements relating to claims into the bank account of the employer via Bacs. HMRC are able to conduct checks to ensure that the data submitted, and the claim paid out, was accurate.

To claim, employers will require the following information:

  • Their PAYE reference number
  • The number of employees being furloughed
  • The claim period (start and end date)
  • Amount claimed (per the minimum length of furloughing of three weeks)
  • Their bank account number and sort code
  • A contact name
  • A contact phone number

Which employers are eligible for the scheme?

The scheme is open to all UK employers who had created and started a PAYE payroll scheme on 19 March 2020. They must have a UK bank account, and must also have enrolled for PAYE online.

The following types of organisation can apply:

  • Businesses
  • Charities
  • Recruitment agencies (agency workers paid through PAYE)
  • Public authorities

Public sector employers who are funded primarily through public grant will be expected to continue delivering public services, vital to the response to Coronavirus.

Where the employer receives public funding for staff costs, and that funding is continuing, employers should use that money to continue to pay staff in the usual fashion and not furlough them. This also applies to non-public sector employers who receive public funding for staff costs.

Will employer on-costs be included such as NICs and Pension?

The government will reimburse 80% of the regular wage of employees, to a maximum of £2,500 per month, and will also cover the associated employer National Insurance (NI) contributions and minimum automatic enrolment employer pension contributions, due on that subsidised amount.

The payment processed for the employee should be subject to the same employee deductions as a normal salary payment, such as PAYE, employee NI and employee pension contributions.

The Apprenticeship Levy should continue to be paid, but the grant from the government will not cover this cost.