The Coronavirus Job Retention Scheme which allows employers to recover certain wage costs for employees that have been furloughed seems to be constantly evolving which perhaps is not surprising given that this is the first time that such assistance has been provided for by the Government.

In the space of a few days we have seen:

• Confirmation that the scheme had been extended until end of June 2020
• Updated employers guidance on the scheme
• A new guide for employers with detailed guidance on how to work out the wage costs that employers can reclaim under the scheme

In terms of points to note:

• The online portal which employers need to use to make the application for the wage costs is now open. Once the claim is submitted, payment should be made in 4-6 days
• Confirmation that the scheme has been extended to the end of June
• Clarification on the notification to employees on being furloughed. To be eligible for the grant, employers must confirm in writing to their employee confirming 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. A record of this communication must be kept for five years. This is still at odds with the Treasury Direction from last week which talked about the employees having to agree in writing. I understand that HMRC have sought to clarify the position and that whilst employees need to be notified in writing that they have been furloughed their written agreement isn’t required. Hopefully the Treasury Direction will be revised to cover that point. However, in most cases it is still sensible to secure the employees written agreement as furloughing employees is likely to involve a variation to the employment contract that they will need to consent to
• For the first time we have had guidance on the issue of holiday and furlough leave which has been one of the areas that has generated lots of questions. It has now been confirmed that furloughed employees continue to accrue leave as per their employment contract. The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below. Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with 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. This applies for both the furlough period and the recovery period. For employers who are topping up pay to 100% this may not cause an issue. However, for employers who have reduced salary down to the maximum level recoverable under the scheme this may be more problematic. It may see employers turning down requests for holiday during furlough to avoid having to top up so that employees are paid the normal rate of pay during the holiday whilst on furlough.

We appreciate that this is a fast moving area and if you have any queries, please contact the Employment Team.