Job retention scheme updates
Member benefit provider, Croner have some updated advice on the fine detail behind the Job Retention Scheme or JRS; here we have picked out some key updates for you.
Applying for the scheme
The scheme portal is not yet open but when it is, you will only be able to make a claim every 3 weeks. When you apply you will need:
- Your ePAYE reference number.
- The number of employees being furloughed.
- The claim period (start and end date).
- Amount claimed (per the minimum length of furloughing of 3 weeks).
- Your bank account number and sort code.
- Your contact name and phone number.
You should make a claim in accordance with actual payroll amounts at the point at which payroll is run or in advance of an imminent payroll. The grant is a reimbursement to the employer therefore you should make the wage/salary payment to the furloughed worker as normal. Employers who are struggling with salary payments because of the current situation may be able to obtain assistance from the Coronavirus Business Interruption Loan Scheme (CBILS).
Tax and National Insurance
Wages of furloughed employees will be subject to Income Tax and National Insurance as usual. Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have chosen to opt-out or to cease saving into a workplace pension scheme. Employers will be liable to pay Employer National Insurance contributions on wages paid, as well as automatic enrolment contributions on qualifying earnings unless an employee has opted out or has ceased saving into a workplace pension scheme.
All employers remain liable for associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on behalf of their furloughed employees.
Employers can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on paying those wages.
If you decide to top up employees’ pay above the 80%, employer National Insurance Contributions and automatic enrolment contribution on that top up salary will not be funded through the Scheme. Nor will any voluntary automatic enrolment contributions above the minimum mandatory employer contribution of 3% of income above the lower limit of qualifying earnings (which is £512 per month until 5th April and will be £520 per month from 6th April 2020 onwards).
Working and training during furlough periods
Once employees are on furlough, they will not be able to work for you during that period, which counts out a couple of days here and there, or a more regular ‘short time’ working arrangement.
They can undertake online training or volunteer subject to public health guidance, as long as they are not making money for you or providing services to you.
If employees are required to, for example, complete training courses whilst they are furloughed, then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised. Because you can place employees on furlough more than once, you do have the option of bringing them in if there is work to do but a period of furlough must stop for this to happen.
You can then agree to place them on furlough again. Each period of furlough must be at least 3 weeks in duration. It will be your decision over whether you allow your furloughed employees to find work elsewhere during furlough considering any current contractual restrictions on this.
BPMA members can access the Croner advice lines via their member benefits, quoting the BPMA scheme and their membership number.