Company News

Coronavirus Job Retention Scheme

Details:

Payroll support for all firms and enterprises in the UK

  • Grant support to cover up to 80% of salary costs of anyone not working due to Coronavirus but whose job has been retained (up to a maximum of E2,500 per month).
  • Wages backdated to 1 March 2020.
  • Initial period of 3 months, but this will be extended if necessary.
  • No limit on the total level of funding available.
  • Ambition for first grants to be “paid within weeks” with a scheme “in place” by the end of April 2020.

Eligibility

  • Covers any  employees who are “furloughed” instead of being made redundant.
  • Covers any employer, business, charity or non for profit organisation in the UK.
    Applies to businesses of all sizes.
  • Criteria for defining a “furloughed” worker have not yet been published.

How to apply

  • Grants will be provided by HMRC, though exact details to be announced. It is not clear if these will take the form of directly paid grants or through credits against other remittance obligations, or some combination of the two.
  • https://www.gov.uk/government/publications/guidanc e-to-employers-andbusinesses-about-covid19/covid-19-support-forbusinesses#support-forbusinesses-through-thecoronavirus-iob-retentionscheme

Additional comments

  • There will be a considerable amount of detail required to implement these measures.
  • It is not clear if 80% of salary costs will be paid only if employers continue to pay the balance of
    20%. The Chancellor’s statement included a comment that that “employers may top-up the wages of workers should they choose to do so”, implying that the grant may not be contingent on employers funding the balance of those wages to full levels.
  • A maximum grant of £2,500 per worker at 80% of salary equates to an annual salary of £37,500. It is not clear how this will be calculated for workers with variable or zero hour contracts for whom there may be no obvious reference point for payment without working hours.
  • It is not yet clear if grants may cover workers put on reduced hours rather as well as those not able to work at all.
  • Employers seeking to utilise grants this will need to consider also the impact and cost of associated wage-linked costs (pension contributions, employer National Insurance, Apprenticeship Levy). Government is yet to announce the exact application process.
  • Employers who have begun redundancy programmes and those who have moved towards mandatory unpaid leave arrangements will have to consider how this alters the fairness of redundancy decisions and adapting existing reduced pay/work strategies.
    The expectation set by Government is for the first payments to be processed “within weeks” and Certainly by the end of April 2020.

How to apply

Next Steps

 

Government is yet to announce the exact application process.

Employers who have begun redundancy programmes and those who have moved towards mandatory unpaid leave arrangements will have to consider how this alters the fairness of redundancy decisions and adapting existing reduced pay/work strategies.

The expectation set by Government is for the first payments to be processed “within weeks” and Certainly by the end of April 2020.

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