COVID-19 FURTHER UPDATE:THE CORONAVIRUS JOB RETENTION SCHEME (4 APRIL 2020)
6th April 2020
An update to this article can be found here: https://www.wjm.co.uk/news/covid-19-further-update-the-coronavirus-job-retention-scheme-2
HMRC has published further guidance which you can find here update to the Coronavirus Job Retention Scheme.
A number of uncertainties have been clarified as follows:
• If contractually allowed employees can start a new job when on furlough (meaning they might end up earning 80% of the old salary and 100% of a new one). Any prohibition on doing so can presumably be waived by the employer. Working for another employer was not prohibited in the earlier guidance, but the new guidance expressly allows it.
• Employees undertaking training during furlough leave must be paid at least the National Minimum Wage, which means that employers have to make up any shortfall. Employees not undertaking training can be paid less than NMW.
• Employees who are self-isolating or are sick (for whatever reason) cannot be furloughed and should be paid SSP or company sick pay.
• Employees who are shielding (or need to stay at home with someone who is shielding) can be furloughed. Shielding is a measure to protect extremely vulnerable people by minimising interaction between those who are extremely vulnerable and others. This means that those who are extremely vulnerable should not leave their homes, and within their homes should minimise all non-essential contact with other members of their household. This is to protect those who are at very high risk of severe illness from coronavirus (COVID-19) from coming into contact with the virus.
• Employers can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary. This is good news for car salesmen and estate agents. But it can only be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough.
• Employers can reclaim 80% of fees (whatever that means) from HMRC. The previous guidance said they could not.
• The 80% does not include non-monetary benefits (eg the value of health insurance or a car).
• As we thought, company directors can be furloughed. They can still perform their statutory duties, but not other work for the company.
• Employees can be furloughed multiple times, ie they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)
• Employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep the record of that written notification for five years.
Lots of areas remain unclear. For example:-
• what do 'statutory duties' actually cover for company directors?
• are employees who TUPE into a business after 28 February covered? Probably not.
• can employees take annual leave when on furlough, and what should they be paid? Current thinking is that the employer should be paying 100% and recovering 80% but his has yet to be clarified.
Please remember that we at WJM are here to help during this exceptionally difficult time, please don't hesitate to get in touch if there is anything you think we can help with.
For any advice in relation to any particular aspects of the above, please contact a member of the Wright, Johnston & Mackenzie Employment team: Liam Entwistle (firstname.lastname@example.org), Martin Stephen (email@example.com), Andrew Wilson (firstname.lastname@example.org) and John Grant (email@example.com)
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