Yet more guidance on the Furlough scheme
Apologies for yet another bulletin but both HMRC and the treasury have today issued more guidance on the operation of the furlough scheme.
HMRC has today published a fourth update to its guidance for employers on the Coronavirus Job Retention Scheme.
As well as publishing the legal basis for the scheme, the Government has announced a number of important changes.
From the further updated CJRS Guidance, the headline is that the key payroll eligibility date has been changed from 28 February to 19 March. Employers can claim for employees on payroll at that date.
The salary reference date for calculating the claim for salaried employees has also changed to 19th March 2020. The revised guidance states that if, based on previous guidance, an employer has calculated their claim based on the employee’s salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020), the employer can choose to still use this calculation for their first claim.
There is also a bit more detail on the documentation firms will need to provide when making their claim.
There has also been a change to the position on employees on unpaid leave. This now provides that if an employee started unpaid leave after 28 February 2020, they can be furloughed. If however an employee went on unpaid leave on or before 28 February, they cannot be furloughed until the date on which it was agreed at the commencement of the leave that they would return from unpaid leave.
Regrettably, there is still no clarification on the amounts to be paid to employees for annual leave.
Moments after publishing the updated CJRS Guidance, the HM Treasury Direction in exercise of powers granted by the Coronavirus Act 2020 was also published.
The headlines of the Direction are:
- The CJRS is not limited to those employees who would otherwise be made redundant. It is applies in respect of “furloughed employees arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus and coronavirus disease”. HM Treasury warn that “No CJRS claim may be made in respect of an employee if it is abusive or is otherwise contrary to the exceptional purpose of CJRS”.
- To claim furlough, “the employer and employee must have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work”. This is significant as the Guidance only requires the employer to confirm the agreement in writing. Employers will need to ensure employees confirm their agreement to the furlough in writing. This may be done by a simple e-mail, but needs to be done and a record kept for 5 years.
- The information required to make a claim has been amended. Provision of the payroll/employee number for furloughed employees is now optional. Employers with fewer than 100 furloughed employees will need to enter details of each employee directly into the system; those with 100 or more furloughed employees will need to upload a file (.xls, .xlsx, .csv or .ods) with the information.
- The employer guidance now mirrors the provision added to the previous version of the employee guidance, that if an employee has had multiple employers over the past year and only worked for one at a time, and is being furloughed by their current employer, none of the former employers should re-hire, furlough and claim for them under the scheme.
- While the guidance suggests employers can furlough employees already on sick leave, the Direction makes it clear that employees on sick leave can only be furloughed once that period of sick leave has ended. Though consistent with the Guidance, once furloughed a period of sickness that arises thereafter can be disregarded.