Answers to many questions on Coronavirus Job Retention Scheme (CJRS)
10 April 2020
The number of questions have increased with each Government announcement and update to guidance. We don’t anticipate this latest update will be any different, however, some of the more commonly asked questions have been addressed in the latest Employer guidance on CJRS.
Updated guidance for employees is also available, we recommend you familiarise yourself with both sets but be aware they are written for different audiences.
We have included a selection of some of the regularly asked questions that we have received, but read the guidance, in full, for all of the latest changes.
Employee transfers under TUPE and on a change in ownership
A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.
Further guidance is available on TUPE rules and on the subject of business succession.
Payroll Consolidation
Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS.
Returning from statutory leave
Statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave.
In line with other employees, claims for full or part-time employees returning from statutory leave after 28 February 2020 should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.
Claims for those on variable pay, returning from statutory leave should be calculated using either the:
- same month’s earning from the previous year
- average monthly earnings for the 2019-2020 tax year.
Agreeing to furlough employees
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.
You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.
Employer minimum Pension
Employer pension contributions that are paid on the subsidised furlough pay, up to the level of the minimum automatic enrolment employer contribution.
The maximum level of grant for employer pension contributions on subsidised furlough pay is set in line with the minimum automatic enrolment employer contribution of 3% on qualifying earnings.
Grants for pension contributions can be claimed up to this cap provided the employer will pay the whole amount claimed to a pension scheme for the employee as an employer contribution.
The latest HMRC employer guidance