Coronavirus Job Retention Scheme – updates

Dear Colleagues,


On Friday 10th April, HM Treasury sent out its second set of updates and clarifications to the Coronavirus Job Retention Scheme and we have listed them below; some sections may already appear in the scheme but have been clarified for your attention.


  • Employees currently on sick leave can be furloughed for business reasons. An employee would no longer receive sick pay and would instead be classified as a furloughed employee. This also applies for those on long-term sick (if the employer chooses to do so), and the guidance makes clear that an employer can claim under both the Scheme for such employees and the statutory sick pay (SSP) rebate scheme, but not in respect of the same period.


  • Employees who become sick whilst furloughed must receive at least SSP. It is up to employers to decide whether to move these employees onto SSP or keep them on furlough, at their furloughed rate.


  • If a furloughed employee who becomes sick is moved onto SSP, the employer can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to two weeks of SSP if it is Covid-19 related. If employers keep the sick furloughed employee on the furloughed rate, they remain eligible to claim for these costs through the Scheme.


  • Shielding employees can be furloughed, without the need for them to be otherwise redundant.


  • We finally have an answer on the TUPE question. The transferee employer is indeed eligible to claim under the Scheme in respect of the employees of a previous business transferred in after 28 February if either the TUPE or PAYE business succession rules apply to the change in ownership.


  • The guidance around the Scheme has always made clear that employees cannot do any work for their own employer whilst furloughed, but it is now confirmed that employees also cannot provide services for or generate revenue for any linked or associated organisation.


  • All of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.


  • Where an employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the Scheme.


  • Employers still need to pay employer NI and pension contributions on behalf of furloughed employees. Employers cannot claim for additional NI or pension contributions made because they have chosen to top up the employee’s salary or any pension contributions made that are above the mandatory employer contribution.


  • It has helpfully been clarified that pay for employees “returning from” statutory leave (i.e. maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave) will not be adversely impacted. In line with other employees, claims under the Scheme for employees whose period of statutory leave ends after 28 February should be calculated on their pre-leave salary, not the pay they received whilst on that leave.


  • Claims for those on variable pay who are returning from statutory leave should be calculated using the higher of: The same month’s earnings from the previous year, or their average monthly earnings for the 2019-2020 tax year.


Further updates and clarifications are expected later this week.





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