COVID-19
Knowledgebase

Duncan & Toplis is here to help and support you through the ongoing challenges presented by the coronavirus pandemic. Whilst this is an anxious time for many, it’s important to know that there is help available.

We are summarising the measures, including eligibility requirements, as they are announced and all details can be found here in our COVID-19 Knowledgebase.

Coronavirus Job Retention Scheme extension FAQs

The extension to the Coronavirus Job Retention Scheme is a welcome one for many employers given the announcement of a national lockdown being imposed from 5 November to 3 December as a minimum.

We have answered some frequently asked questions below which we hope will clarify how the scheme will operate in addition to our detailed guidance which can be found here.

Who is eligible?

Employees who:

  • are on an employer’s PAYE payroll on 30 October 2020 – this means that the employer must have made a RTI submission for that employee between 20 March to 30 October 2020.
  • were on an RTI on 23 September but were subsequently made redundant or stopped working for the company, if they are re-employed.
  • have been advised to shield due to a medical condition.
  • have caring responsibilities resulting from coronavirus, such as childcare issues.

Can I place an employee on furlough leave who has not been previously?

Yes, employees do not need to have taken furlough leave previously through the scheme as long as the eligibility criteria is met.

Is there a minimum amount of time that I can put an employee on furlough leave for?

There is no minimum period of furlough leave required, however employers can only claim for a minimum period of seven consecutive calendar days.

Can I backdate an employee furlough agreement?

You can retrospectively place employees on furlough or flexible furlough leave with effect from 1 November 2020, however the agreement to retrospectively claim furlough must occur on or before Friday 13 November if you intend to make a claim for this employee’s furlough pay.  If the arrangement is made after the 13 November, the employer will not be able to make a claim for this period.

Can I claim furlough pay for an employee who is serving statutory notice?

For statutory notice periods up to 1 December 2020, employers have been able to reclaim the applicable % of notice payments through the scheme.

The Government have recently confirmed that from 1 December 2020, any employees who are serving statutory notice for the company which falls after this date will not be eligible for claims under the new extension. Therefore, from this date, notice should be paid at 100% of pre-furlough pay and cannot be reclaimed.

What do I do with employees who are shielding?

Those who have been advised to shield due to a medical condition will be eligible for furlough leave or the employer can choose to pay them Statutory Sick Pay in line with their absence policy if they are unable to work from home. In either case, the employee should be notified in writing of the decision.

How much should I pay employees on furlough leave?

Employees that have previously been on furlough leave and are on fixed pay

Pay should be based on the last pay period ending on or before 19 March 2020 for employees who either:

  • were on the payroll on 19 March 2020 and the employer made a payment of earnings to them in the tax year 2019 to 2020 which was reported to HMRC on a RTI Full Payment Submission on or before 19 March 2020.
  • the employer made a valid CJRS claim for in a claim period ending any time on or before 31 October 2020.

For all other employees who were not previously eligible, the reference period is the last pay period ending on or before 30 October 2020; this will only apply for periods starting after 1 November 2020.

Employees that have previously been on furlough leave and are on variable pay

If the employee has variable pay, how their usual wages is calculated depends on when they were on your payroll.

For employees who were on your payroll on 19 March 2020, that is you made a payment of earnings to them in the tax year 2019 to 2020 which was reported to HMRC on a  RTI Full Payment Submission on or before 19 March 2020, you should calculate 80% of the higher of:

  • the wages earned in the corresponding calendar period in the tax year 2019 to 2020.
  • the average wages payable in the tax year 2019 to 2020.

This also applies to employees for whom you made a valid CJRS claim for in a claim period ending any time on or before 31 October 2020.

For all other employees’ you should calculate 80% of the average wages payable between 6 April 2020 (or, if later, the date the employment started) and the day before they are furloughed on or after 1 November 2020.

Employees that have not previously been on furlough leave

Fixed salary – 80% of wages payable in the last pay period ending on or before 30 October 2020.

Variable pay – 80% of the average payable between the employees start date (or 6 April, whichever is later) and the day before their CJRS extension furlough leave period begins.

 

The CJRS grant does not cover employers’ National Insurance contributions or pension contributions. Employers must deduct and pay to HMRC income tax and employee National Insurance contributions on the full amount that they pay to the employee, including any scheme grant.

What do I pay an employee if they continue to be on furlough leave for their full hours?

At a minimum, employers must pay their employee no less than the lower of 80% of their regular wage or £2,500 per month with usual tax and National Insurance payments. Any pay reduction from 100% must be agreed by the employee. An employer can also choose to top up an employee’s salary beyond this, but is not obliged to under this scheme.

Minimum auto-enrolment pension contributions will continue on the reduced salary. If you provide enhanced pension contributions this will contractually have to continue, unless you change your employees’ terms and conditions in line with usual employment law practices.


 

If you have any questions or queries that have not been answered above, please contact your usual account manager or submit an enquiry for our team here.

Please note, we are only able to offer advice and guidance from a business perspective and are therefore unable to answer any personal enquiries from individual employees.