Information for Employees

Who Can Claim?

If you have a contract of employment, most likely your employer is can claim support through Coronavirus Job Retention Scheme. Below are formal criteria for eligibility:

Registered for PAYE on or before 19th March 2020;
Enrolled for PAYE Online with HMRC;
Your employer must have a UK bank account to receive money from the government.

Coronavirus Job Renetion Scheme supports employers. The objective is to help employers to keep people in employment throughout this difficult times so business can resume in future without hassle of hiring new employees.

If you believe your employer may be struggling, it is fair to speak to them about current situation. If they are not aware of Coronavirus Job Retention Scheme, you may bring it to their attention.

Coronavirus Job Retention Sheme open to all business operating in the UK.

Even if your employer is a foreign company or a foreign national. As long as your employment is properly registered with HMRC for PAYE money can be claimed.

What Can Be Claimed?

This is a Job Renetion Scheme. A business can only claim if it is suffering from coronavirus (COVID-19).

For each employee on furlough leave, an employer can claim up to 80% of their wages plus money to cover Employer National Insurance (13.8% usually) and minimum automatic enrolment employer pention contribution (3%).

In practice it means that up to 80% of your salary or wages will be sponsored by the government.

To be eligible, an employee must have joined employment on or before 19th March 2020 and must be send on furlough leave for a period of at least 3 weeks.

Furlough Leave

What is furlough leave? It is a special type of leave when an employee doesn’t do any work for the employer for a period of time very similar to annual leave or maternity leave. To be eligible, furlought leave must be for 3 weeks at least and must not be interrupted.

A typical employment contract would not have provision for furlough leave. As such it is mandatory to negotiate an alteration to terms of employment. You don’t have to agree to such changes, however your employer may decide to make you redundant if you refuse.

If your employer suffered complete shutdown because of coronavirus, they may not have any money to pay your wages or salary. Coronavirus Job Retention Scheme grants from the government may be the only source of income they get for now.

As someon on furlough leave, you don’t have to agree to pay cut. How much you are paid should be negotiated with your employer.

Some Examples

Full-time Employee

Your employer is required to pay your salary as per your existing employment contract. If they negotiate an alteration of terms of employment with you and send you on furlough leave, you should receive at least 80% of average salary over last 12 months up to £2500 limit. Your employer can agree to pay your existing salary in full or offer some other form of compensation.

According to the goverment, it is permitted to work for another employer as long as it is not associated or connected with your current employer even if you are on furlough leave.

However your agreement with your employer can prohibit you from doing any work for someone else while on furlough leave.

Part-time Employee

Your employer is required to pay your salary as per your existing employment contract. If they negotiate an alteration of terms of employment with you and send you on furlough leave, you should receive at least 80% of average salary over last 12 months up to £2500 limit. Your employer can agree to pay your existing salary in full or offer some other form of compensation.

If you continue work for some other employers during your furlough leave, it is important that these are not linked to the employer who is claiming grant through Coronavirus Job Retention Scheme.

Zero-Hour Contracts

If you worked for a period of time and still in employment, your employer can agree to send you on furlough leave and claim money from the government. Amount of grant they will receive will be 80% of your average wages. This money should be paid to you as an employee on furlough leave.

Fixed-Term Contracts

Employees on fixed-term contracts are eligible for furlough leave. Your contract can be renewed even if you are on furlough leave. Furlough leave must be for at least 3 weeks without any interruption. If your contract is not renewed, your employer will not be able to claim money through Coronavirus Job Retention Scheme.

Taxation

Any salary or wages you receive while on furlough leave are considered personal income and are subject to usual income tax and other deductions.

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