Job Retention Scheme
Under the coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.
This applies to employees who have been asked to stop working, but who are being kept on the pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.
The Government will also cover employer National Insurance and minimum auto-enrollment pension scheme contributions of furloughed workers – on top of 80% of salary.
The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st if applicable and is initially open for 3 months, but will be extended if necessary.
HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
How to access the scheme
All UK-wide employers with a PAYE scheme will be eligible. Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:
- full-time employees
- part-time employees
- employees on agency contracts
- employees on flexible or zero-hour contracts
In order to access the scheme, you will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- once the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings (HMRC will set out further details on the information required)
For further information on the Coronavirus Job Retention Scheme please read the guidance for employers. The Government have also published guidance for employees.
For further information on the full range of business support measures which have been made available to UK businesses, visit the Governments Coronavirus Business Support website.