Coronavirus Job Retention Scheme 

The Chancellor has announced three changes to the job retention scheme: 

    1. From 1‌‌ July 2020, the scheme will be made more flexible to enable employers to bring previously furloughed employees back part time and still receive a grant for the time when they are not working. 
    2. From 1‌‌ August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff and this employer contribution will gradually increase in September and October. 
    3. The scheme will close to new entrants from 30‌‌ June. 

a. Part time furloughing 

From 1‌‌ July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work. 

Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for. 

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked. 

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules. 

b. Employer contributions

From August, the government grant provided through the job retention scheme will be slowly tapered. 

  • in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work. 
  • in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.
  • in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
  • in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
  • the cap on the furlough grant will be proportional to the hours not worked. 

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution. 

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August. 

c. Important dates 

It’s important to note that the scheme will close to new entrants from 30‌‌ June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30‌‌ June. This means that the final date by which an employer can furlough an employee for the first time will be 10‌‌ June for the current three-week furlough period to be completed by 30‌‌ June. Employers will have until 31‌‌ July to make any claims in respect of the period to 30‌‌ June.


Employees, including company directors who are carrying out no work can, by agreement, be furloughed and the government will pay 80% of their pay up to £2,500 per employee a month. In the case of directors they must carry out no work except statutory duties (i.e. preparing/filing accounts etc). A claim must be submitted for the grant via a portal opening on 20th April 2020

The scheme is now extended to 31 October 2020.

On 20th March Rishi Sunak announced a major job retention scheme aimed at stopping redundancies due to the Coronavirus crisis.  Under the scheme 80% of wages would be subsidised by grant for employees who have been furloughed due to the crisis. (Capped at £2,500 gross pay subsidised per month) per employee.  

This is available to all sectors operating PAYE not just the leisure/retail/hospitality sector that has been so badly affected.

Employer’s immediate action plan re job retention:

  • Plan the next few month’s likely workload and employee time requirements
  • Consider which key staff will be required when the business is back to normal, consider if you would offer to top up furlough pay
  • Check employment contracts for a clause re lay-off, reduced hours, change of status
  • Get advice on the contract if needed, negotiate and notify employees of any furlough
  • Where employees are furloughed state in writing that they will do no work and then save written confirmation of the employee's acceptance of that for 5 years.
  • Secure short term cashflow until the funding is received (likely mid/late April)
  • Notify HMRC and claim the grant - portal will open on 20th April 2020.

While we await further details here is a Q&A based on what we know, we cannot advise on employment law so specific advice should be taken on this and we can refer you to WBW Solicitors who we work with.

What is “furloughed”?
This is another term for lay-off, basically it means a temporary period in which the employee is not working or carrying out any duties but is still kept on payroll.

Who can be furloughed?

An employee who was on PAYE at 19th March 2020 (previously 28th February 2020 but extended)

How much is the subsidy?
Up to 80% of salary can be claimed back, up to £2,500 per employee.   Employer’s NI on the 80% subsidised wage can also be claimed, and employer pension contributions up to the minimum 3% rate.

Can the employer top up, must they top up to 100%?
Employers are not obliged by the government to top up but they may wish to. 

Can I just make someone furloughed?
Check employee contracts, if there is no provision for a furlough period/change of status you will need to consult with employees, it is expected most employees would opt for furlough rather than redundancy. We cannot advise on contracts so speak to a specialist if required, we can refer you. 

Generally there will be no provision for sending an employee home on less pay so care must be taken so there is no unlawful deduction of wages/breach of contract/unfair dismissal.

Where the contract is silent/does not provide for furlough you may be advised to consult employees and issue a letter to employees giving their options of redundancy/unpaid leave/furlough at 80%.  Redundancy pay and notice periods may apply if redundancy route is chosen, speak to us for a calculation. If employer cannot pay statutory redundancy the employee may have recourse to make a claim form the government.

Latest guidance states that it must be agreed in writing by the employer/employee that no work will be carried while on furlough. We suggest an email stating that to employees, with an acceptance reply back from the employee should be saved as best practice and saved for 5 years.

How can the employer make a claim?
The employer portal will be open on 20th April 2020, Marsland Nash can make claims or employers can do so themselves. Claims can be made up to 14 days before the paydate.

I’ve already put my employee on short time, can I claim?
Employees must NOT be carrying out work, it may be better to have half the employees furloughed and qualifying for support, rather than all the employees on half time

When does it apply from?
The government indicated the support would be available from 1 March backdated, if redundancy decisions have already been made they could potentially be reversed in view of the scheme.

When does it apply from?

It was announced on 12th May that the scheme would run until 31 October 2020, a change to the scheme from August 2020 will allow employees to be part time/part furlough, further details to follow when published.

Update - Monday 6th April 2020

The government updated its guidance on the Coronavirus Job Retention Scheme over the weekend. If you plan to issue a claim under the scheme, we strongly advise you to review the updated guidance which can be found at the following link:

  • The guidance confirms that apprentices can furloughed whilst they continue to train but employers pay at least the National Minimum Wage for time spent training. 
  • Employees who need to stay at home with someone who is shielding can be furloughed if you would otherwise have had to make them redundant. 
  • Employees on fixed term contracts can be furloughed and their contracts can be renewed/extended during the furlough period. 
  • The guidance confirms that office holders (including directors), salaried members of LLPs, agency workers (including those employed by umbrella companies) and limb (b) workers can all be furloughed. 
  • Directors who are furloughed  may still fulfil the statutory obligations that they owe to the company  (provided it is no more than would be reasonably judged necessary for that propose) but should not do work of a kind that they would carry out in normal circumstances to generate commercial revenue or provide services to or on behalf of their company. 
  • To be eligible for the grant, employers must confirm in writing to their employee that they have been furloughed. The date of furlough is the date the employee finishes work and starts furlough (not when they were written to confirming their furlough status). 
  • Employers can claim for regular payments that they are required to pay employees including past wages, past overtime, fees and compulsory commission payments but excluding discretionary bonuses, tips, non-compulsory commission payments and non-cash payments.
  • The reference salary should not include the cost of non-monetary benefits, including taxable Benefits in Kind and salary sacrifice schemes. However, the HMRC has agreed that COVID-19 is a life event that could warrant changes to salary sacrifice arrangements. 
  • Apprenticeship Levy and Student Loans should continue to be paid as usual. 
  • Employees can be furloughed multiple times provided that each instances is for a minimum of 3 consecutive weeks. 
  • Employees who are furloughed can work for another employer if their employment contract allows this.  

HMRC confirmed on 9 April 2020 the following employees are covered:

  • Unpaid leave -  if leave started before 28 February 2020 furlough would follow that leave.
  • Maternity and paternity leave - those on statutory leave can return from that leave and be furloughed.
  • Sick leave - Furloughed employees who become sick can be moved on to SSP, and sick employees can be furloughed, but the job retention scheme only covers salary not SSP
  • Working for another employer - these employees can be furloughed as long as they are doing no work for the employer who is furloughing them.
  • There is also information that employees who cannot work due to childcare issues caused by the virus can request to be furloughed.
  • The scheme has been extended by a month and will run to 30 June 2020 now.