{"id":537,"date":"2020-03-23T12:14:23","date_gmt":"2020-03-23T12:14:23","guid":{"rendered":"http:\/\/harrisandclarke.com\/harris\/?p=537"},"modified":"2020-03-23T12:19:56","modified_gmt":"2020-03-23T12:19:56","slug":"23rd-march-2020-update-as-to-80-relief","status":"publish","type":"post","link":"https:\/\/harrisandclarke.com\/harris\/?p=537","title":{"rendered":"23rd March 2020 (12.18pm) &#8211; Update as to 80% wage relief"},"content":{"rendered":"<div id=\"blk_05\" class=\"vx_block\">\n<table border=\"0\" width=\"100%\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td class=\"table-padding\" width=\"100%\">\n<div id=\"txt_03\" class=\"vx_text\">\n<p>At the Prime Minister\u2019s daily press briefing on 20th March, the Government announced a new scheme to help businesses retain their staff, which has been called the\u00a0<strong>Coronavirus Job Retention Scheme<\/strong>.<\/p>\n<p>This will be in the form of grants to businesses through HMRC. At the time of writing, there is limited information on how this will operate in practice, including for example the information which needs to be supplied to HMRC.<\/p>\n<p>However, what we have been told* is that, under the Scheme, all employers in the United Kingdom will be able to access support to continue paying part of employees\u2019 salaries, where the employees would otherwise have been laid off during this current crisis.<\/p>\n<p><strong>Eligibility<\/strong><\/p>\n<p>Under other support schemes which the Government has recently introduced to help businesses, there are a considerable number of criteria in place as regard eligibility.<\/p>\n<p>However, under this Scheme,\u00a0all\u00a0UK businesses are eligible.<\/p>\n<p>The Chancellor announced that\u00a0<em>\u201cAny employer in the country, small or large, charitable or non-profit, will be eligible for the Scheme.\u201d<\/em><\/p>\n<p><strong>How much will the Government pay?<\/strong><\/p>\n<p>Guidance we have says that HMRC will reimburse:<\/p>\n<ul>\n<li>80% of a \u201cfurloughed\u201d worker\u2019s wage costs.<\/li>\n<\/ul>\n<ul>\n<li>Up to a cap of \u00a32,500 per month. We believe this is the gross sum.<\/li>\n<\/ul>\n<p>HMRC we understand are working urgently to set up a system for reimbursement, as existing systems are not yet set up to facilitate payments to employers.<\/p>\n<p>It is however anticipated that payments will start to be made by the end of April.<\/p>\n<p><strong>Will the employer be obliged to top up the wages to 100%?<\/strong><\/p>\n<p>No. The employer can choose to fund the differences between this payment and the employee\u2019s pay, but does not have to.<\/p>\n<p><strong>What does \u201cfurloughed\u201d mean?<\/strong><\/p>\n<p>There are many definitions and it is not a term used in UK employment law, but in essence a furlough is a temporary lay-off from work.<\/p>\n<p>A furloughed worker, therefore, is someone who has been temporary laid-off from their job.<\/p>\n<p>Under employment\u00a0practice, the term \u201clay-off\u201d is used to cover a variety of different situations, ranging from being dismissed for redundancy to having working days reduced.<\/p>\n<p>However, \u201clay-off\u201d under employment\u00a0law\u00a0is, strictly, where an employee is provided with no work or pay for a week, but they remain an employee.<\/p>\n<p>We are still waiting for guidance, but the thinking is that the Scheme will apply where employees are laid-off in this latter, strict legal sense, i.e. where they have no work or pay for a week, or multiples of weeks.<\/p>\n<p>If this is the case, this would then not apply where an employee is on short-time working (used in its broadest sense), where an employee does work during each week, but for less hours and\/or days and is paid accordingly.<\/p>\n<p>This view is reinforced by Government\u2019s (albeit very limited and general) guidance available to employees on this subject, which says as follows:<\/p>\n<p>\u201c<em>To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of \u00a32,500 per month<\/em>.\u201d**<\/p>\n<p>**<a href=\"https:\/\/sites-hewitsons.vuture.net\/e\/zyuatznzmsesyhg\/30be89c3-b0ff-48c3-bf9a-57fc538af5fd\" target=\"_blank\">https:\/\/www.gov.uk\/government\/publications\/guidance-to-employers-and-businesses-about-covid-19\/covid-19-guidance-for-employees<\/a><\/p>\n<p>We believe that the individual needs to have been \u201con the books\u201d for PAYE purposes as at 28th February 2020.<\/p>\n<p>We would stress, however, that Guidance is awaited from the Government.<\/p>\n<p><strong>What about employees on \u201czero hours\u201d contracts?<\/strong><\/p>\n<p>When asked if the Scheme will cover zero-hour contracts, the Chancellor replied,<em>\u00a0\u201cIt covers everybody who is on the PAYE system through a company.\u201d<\/em><\/p>\n<p>He went on to say:<\/p>\n<p><em>\u201cIt may well be you are on a PAYE scheme and have a set of regular earnings and it will be covered depending on your particular circumstances.\u201d<\/em><\/p>\n<p><em>\u201cI can\u2019t generalise for every single person\u2019s employment status, but in general our desire here is to cover as broad a range of people as possible.\u201d<\/em><\/p>\n<p>If that is indeed the case, then as zero hours employees would usually be on the employer\u2019s PAYE payroll system, the Scheme would apply to them. As for their pay (which often varies under such contracts), the likelihood is that the employer will need to give details to HMRC of the employees\u2019 average earnings for HMRC to decide how much to pay.<\/p>\n<p><strong>How long will the Scheme last for?<\/strong><\/p>\n<p>The Scheme will be backdated to 1st March 2020 and open initially for &#8220;at least&#8221; three months.<\/p>\n<p>It is anticipated that payments will start to be made by the end of April 2020.<\/p>\n<p><strong>How to access the scheme<\/strong><\/p>\n<p>The Scheme comes in the shape of a grant and will be provided through HMRC.<\/p>\n<p>From the information made available to date, employers will need to do the following:<\/p>\n<ul>\n<li>Designate affected employees as \u2018furloughed workers,\u2019 and notify their employees of this change.<\/li>\n<\/ul>\n<ul>\n<li>Submit information to HMRC about the employees that have been \u201cfurloughed\u201d and their earnings through a new online portal.<\/li>\n<\/ul>\n<p>We are told that HMRC will set out further details on the information required.<\/p>\n<p>The limited guidance available makes the point that businesses cannot simply change an employee\u2019s status to be a furloughed worker, as doing so is still subject to employment law principles.<\/p>\n<p>Unless there are specific and clear terms in the employees\u2019 contracts of employment, to lay-off an employee (i.e., to provide them with no work and no pay) requires the employee\u2019s consent.<\/p>\n<p>This means that the employer will need to consult with those employees it wishes to designate as furloughed workers and obtain their agreement to this.<\/p>\n<p>It will be very important to ensure that the agreement reached with the employees makes clear that, by being designated as a furloughed worker, it is agreed that until, say, further notice, the employer will not provide the employee with any work, and that the only pay which the employee will receive will be the sums which the employer itself receives for that employee through this Scheme \u2013 unless of course the employer wishes to top up the payment.<\/p>\n<p>Businesses who wish to take advantage of this Scheme are advised strongly to keep an eye out for publication of the Guidance which the Government has promised will follow.<\/p>\n<p>As information to be fed into HMRC\u2019s portal will require details of earnings, it is anticipated that businesses\u2019 payroll providers will be a very important part of this process for those businesses.<\/p>\n<p><em>Information as at 21st March 2020<\/em><\/p>\n<p>*Main source throughout:\u00a0<a href=\"https:\/\/sites-hewitsons.vuture.net\/e\/dnucnjwrr8qcgq\/30be89c3-b0ff-48c3-bf9a-57fc538af5fd\" target=\"_blank\">https:\/\/www.gov.uk\/government\/publications\/guidance-to-employers-and-businesses-about-covid-19\/covid-19-support-for-businesses<\/a><\/p>\n<p>&nbsp;<\/p>\n<p>For more information on the items raised in this article please contact our employment team by\u00a0<a href=\"mailto:nicholashall@hewitsons.com\">clicking here<\/a>.<\/p>\n<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<div id=\"blk_06\" class=\"vx_block\">\n<table border=\"0\" width=\"100%\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td class=\"table-padding\" valign=\"top\" width=\"100%\">\n<table border=\"0\" width=\"100%\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td class=\"line\" height=\"1\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/sites-hewitsons.vuture.net\/9\/74\/_images\/spacer.gif\" alt=\"\" width=\"1\" height=\"1\" \/><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>At the Prime Minister\u2019s daily press briefing on 20th March, the Government announced a new scheme to help businesses retain their staff, which has been called the\u00a0Coronavirus Job Retention Scheme. This will be in the form of grants to businesses &hellip; <a href=\"https:\/\/harrisandclarke.com\/harris\/?p=537\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=\/wp\/v2\/posts\/537"}],"collection":[{"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=537"}],"version-history":[{"count":3,"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=\/wp\/v2\/posts\/537\/revisions"}],"predecessor-version":[{"id":541,"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=\/wp\/v2\/posts\/537\/revisions\/541"}],"wp:attachment":[{"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/harrisandclarke.com\/harris\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}