[Guidance is changing quickly and this was correct at time of posting]
On 30 April 2020 the four main guidance documents relating to the Coronavirus Job Retention Scheme (CJRS) were updated once more. There was a further amendment to the employer guidance on 1 May 2020 but this merely added a link to webinars and the substance of the text was not changed from the day before. The employee guidance was also amended on 1 May 2020 – twice! First, some links were added, as per the employer guidance. Later, more material was added with respect to shared parental pay guidance and a new section for maternity allowance.
The first piece of guidance is about how to claim and this acts as a gateway to the other three and nothing of import has changed here: https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
With respect the employee guidance (https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme), apart from the new section on maternity allowance mentioned above, the family leave section now refers to parental bereavement leave and there are links to other sites about calculating leave on or after 25 April 2020, bearing in mind recently introduced legislation.
There are also changes to the section “How your monthly wages are calculated”:
The amounts your employer should use when calculating 80% of your wages are regular payments that they must make, including:
- regular wages they pay you
- non-discretionary overtime
- non-discretionary fees
- non-discretionary commission payments
- piece rate payments
They cannot include the following when calculating your wages:
- payments made at their or a client’s discretion - where they or a client was under no contractual obligation to pay you, including:
- any tips, including those distributed through troncs
- discretionary bonuses
- discretionary commission payments
- non-cash payments
- non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce your taxable pay
Essentially this expands on the previous wording and clarifies what was already understood to be the case.
The section on “Returning from family related statutory leave” has undergone a slight change which makes it clear that the higher option, in relation to pay that varies, should be chosen.
There is also clarification that those on furlough may still undertake union or non-union representative roles for the purpose consultations, so long as they do not generate revenue for or provide services to the employer.
Finally, there is a new section which makes it clear that directors who only get paid annually are eligible to claim, as long as they meet the relevant conditions of the scheme. This includes being notified to HMRC on an RTI submission on or before 19 March 2020, relating to a payment of earnings in the 2019-20 tax year. This may prove a problem for some.
The employer guidance (https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme) also includes a section on annually paid directors which is the same as that in the employee guidance.
The key change is with respect to TUPE transfers. A new employer can once again claim with respect to employees of a previous organisation where they were TUPE transferred after 28 February 2020. This takes us back to the position we were in prior to an amendment made on 15 April 2020. However, the Treasury Direction that was issued that same day still refers to 19 March 2020, so there is a conflict here. However, with HMRC saying that they will rely on their guidance for the administration of CJRS, employees transferred under TUPE after 28 February 2020 can now be put on furlough. The wording leaves open the possibility that some service provision changes may not be included but this has yet to be clarified.
In relation to family related leave, the employer guidance also follows the provisions mentioned in the employee guidance.
If clarification was required, the employer guidance also makes it clear that the periods of leave do not have to be in multiples of three weeks. The three-week marker applies only to the minimum length that an employee can be on furlough.
Finally, the employer guidance expressly states that CJRS grants are not classed as state aid.
The final guidance document is the one to help employers work out 80% of wages in order to make a claim (https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme).
This reiterates some of the changes mentioned above and introduces the maximum daily amount available in June 2020, now that the scheme has been extended into that month. New agreements will have to be made with employees if the existing arrangements have only been put in place up to the end of May 2020.
As of writing it is unclear whether there will be a further wholesale extension of the scheme. A lot will depend on the measures the Government put in place for a return from lockdown. The type of work and how it is performed could be a significant factor, with the possibility that the CJRS may continue beyond June 2020 for only some sectors of the working population.
This guidance sets out various examples for the calculation of claims and they have been adjusted and expanded upon in the section relating to National Insurance Contributions (NICs). There is also new wording where adjustments have to be made in light of Employment Allowance.
Finally, there is wording relating to the calculations required for calculating a director’s Class 1 NICs.
[There is a further update to this post, click here]