What is a Job Retention Scheme?

Government recognises we are going through exceptional times. To help employers and employees to survive they offer generious grants so businesses keep employees even if they don’t have any money.

Once everything goes back to normal, people will just return to their existing positions and roles.

Employees

if your employer is struggling financially because the situation, they don’t need to fire you. Instead government introduced a Job Retention Scheme that gives your employer money so they can pay your salary or wages.

Employers

When business is struggling, reducing staff count is one of natural decisions. However if business problems have temporary nature, you can ask government to help you financially. Up to 80% of salary can be reimbursed.

Why Furlough Leave?

As some of experts reported, modern day employment laws are not designed for country shutdown and current levels of business disruption. In particular, it is very difficult to reduce pay and send employees on forced leave.

This is probably the reason why US term “furlough leave” was imported. For example, in 2010 the US Senate didn’t agree on emergency funding measures and it resulted in 2000 workers for the Department of Transportation to be furloughted.

For now, if an employer wants to receive money under the Coronavirus Job Retention Scheme, they must negotiate furlough leave with employees. Longer term it is possible that provisions for furlough leave will become a new norm in the UK.

Timeline

27 March 2020
Original details of the Coronavirus Job Retention Scheme were published by HMRC
27 March 2020
06 April 2020
GOV.UK website updated to include guidance.
06 April 2020
09 April 2020
HMRC published guidance on what should be provided for a successful claim.
09 April 2020
17 April 2020
The Coronavirus Job Retention Scheme to include June 2020. Further extensions are possible.
17 April 2020
12 May 2020
The Coronavirus Job Retention Scheme extended to October 2020. Employers will be asked to contribute.
12 May 2020

Calculation

Specific details of the calculation are not available yet, but it is understood that amount that can be claimed is 80% of average salary or wages for the period of 12 months (March 2019 – February 2020).

Plus employer gets money to pay Employer National Insurance and minimum automatic enrolment employer pension contribution.

We will update this website once exact details of calculation used by HMRC is clear.

Maillist

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