The coronavirus job retention scheme (CJRS) has now been extended to 30 June 2020 and may be extended further. The HMRC online portal enabling employers to access the grant went live on 20 April. There are now five different HMRC guidance documents covering the scheme including an online calculator to assist employers.
The guidance now expressly states that HMRC will check claims made through the scheme, payments may be withheld or will need to be repaid if the claim is based on “dishonest or inaccurate information or found to be fraudulent”, and HMRC has put in place an online portal for employees and the public to report suspected fraud in the scheme.
It has been clarified that claims in respect of employees who left after 28 February and have been re-employed should be backdated to when the employees were re-employed “and furloughed”. This is not completely clear but seems to indicate the period between termination and re-employment is not covered. Further details about fixed term contracts have been added.
The guidance now states: “To be eligible for the grant employers must confirm in writing to their employee confirming [sic] that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming the CJRS. There needs to be a written record, but the employee does not have to provide a written response”.
This would appear to be intended to address the alarm caused by the section of the Treasury Direction published on 16 April which states that for an employee to be furloughed the employer and employee must have “agreed in writing” that the employee will cease all work.
The Treasury Direction also says that if an employee is entitled to statutory sick pay (SSP) at the time the employer’s instruction to cease all work has been given, the employee cannot be furloughed until their original entitlement to SSP has ended. However, this pre-condition is not mentioned in the employer guidance, and HMRC’s recently updated statutory payments manual provides that employees do not qualify for SSP if they are on furlough.
The guidance now states the amount employers should use when calculating 80 per cent of their employees’ wages is “regular payments you are obliged to make, including: regular wages you pay to employees; non-discretionary overtime; non-discretionary fees; non-discretionary commission payments; piece rate payments”.
It should not include “payments made at the discretion of the employer or a client – where the employer or client was under no contractual obligation to pay, including: tips; discretionary bonuses; discretionary commission payments; non-cash payments; nonmonetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay”.
We also now have detailed guidance on how to calculate employees’ wages for the purposes of making a claim, and the employer National Insurance contributions and pension contributions that can be claimed.
And last, but not least, it is now confirmed that employees can take holiday during furlough, although they must be paid in full for holiday days as required by the Working Time Regulations. Employers “will be obliged to pay additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need”.
Melanie Lane and Tracey Marsden are employment partners at CMS