Parish HR

The Coronavirus Act 2020: Job Retention Bonus and Job Support Scheme

UPDATE – November 2020 

The Guidance for the extended Coronavirus Job Retention Scheme has just been released.

There are thirteen sets of updated guidance, the two most important being:-

Check which employees you can put on furlough; and,

Check if you can claim for your employees’ wages

The former says: “The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.”  In other words, employers thinking about dismissing someone (whether for redundancy or otherwise), should consider giving them notice before 1 December.

The latter says: “From December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards.”

The other key points are:-

  • From 1 November 2020 employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
  • Employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee, unless they re-employed an employee after 23 September 2020.
  • There is no maximum number of employees that employers can claim for (under the existing furlough scheme, employers could only claim for the number of employees they had claimed for previous to June).  Employees returning from maternity leave need to give the statutory eight weeks’ notice to end maternity leave early in order to be furloughed (and get furlough pay, typically higher than SMP).
  • The employer must confirm in writing to the employee that they have been furloughed, and keep a written record for five years.
  • Employers can agree retrospectively to furlough someone with effect from 1 November 2020, as long as the agreement to retrospectively claim furlough occurs on or before 13 November.

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PREVIOUS UPDATE – 5 October 2020

The Coronavirus Job Retention Scheme for furloughing employees ends on 31 October 2020. The following support will be available from the Government:

Job Retention Bonus

The Job Retention Bonus is available to employers in respect of each employee who (a) has been on furlough at some point; and (b) remains employed, and not under notice, on 31 January 2021. Government guidance is available here.

HMRC will make a payment of £1,000 to the employer for each eligible employee.  This is a bonus to the employer, and the employer does not have to pass it over to the employee.

To receive the bonus, the employer must have paid a salary of at least £1,560 to the employee between 6 November 2020 and 5 February 2021.

A claim for the bonus needs to be presented in a 6-week window between 15 February and 31 March 2021.

Job Support Scheme

The job support scheme, the successor to the job retention scheme, starts on 1 November. Under this new scheme, the government will top up the wages of employees on reduced hours.

To be eligible, employees need to be working at least a third of their normal hours, for which the employer will pay them as normal. Employers must also pay the employee a third of their wages missed because of their reduced hours, with the government contributing another third to a cap of £697.92 per month.

Employees must be on an employer’s PAYE payroll on or before 23 September 2020. Employers will be able to make a claim online from December 2020 on a monthly basis, and grants will be payable in arrears after payment to the employee has been made and that payment has been reported to HMRC. The scheme is also restricted to small and medium-sized businesses and to large businesses that can show their turnover has fallen as a result of the crisis. It will run for six months until 30 April 2021.

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PREVIOUS UPDATE – 09 June 2020

The Coronavirus Act 2020: The Coronavirus Job Retention Scheme: Furloughing employees during the Coronavirus months.

1.0 Employers will be able to bring furloughed workers back part-time from next month

From 1 July employers will be able to return furloughed workers on a part-time or reduced-hours basis while still claiming from the job retention scheme for the hours the employee isn’t working. This means, for example, if a worker is brought back for two days a week, the employer will pay these two days in full as usual, while continuing to claim 80 per cent of the employee’s wage cost through the furlough scheme for the other three days.

2.0 Employees need to be on the scheme by 10 June

The flexible furlough scheme will be introduced as a new scheme, with the current system coming to a close on 30 June. However, claims will be restricted to employees already furloughed before this date. This means any organisation wanting to make use of the new scheme’s flexibilities will need to have furloughed these staff by 10 June, to allow them to complete the minimum three weeks required by the current scheme before it comes to an end.

3.0 There are no new provisions for new starters

To reduce fraudulent claims, the job retention scheme included a cut-off date after which employees starting at a company were not eligible. This latest start date was pushed forward, from 28 February to 19 March, in an attempt to make the scheme more inclusive. However, this still left many employees in the lurch. New Starter Justice, a campaign group, has estimated that 1.6 to 2.3 million people had just started or were due to start new jobs when the lockdown was introduced. And while employers were allowed to rehire and furlough individuals who had left for a new job before 19 March, there was no obligation to do so.

Cheese said: “[It is] disappointing… that no provision has been made for those who started new jobs but missed the cut-off date in March and have lost out on furlough support.” He added it was something the CIPD had raised directly with the chancellor.

4.0 Employers will not have to contribute until August

The job retention scheme will continue operating as it has done since launch for the rest of June and throughout July, with the government paying 80 per cent of wages up to a maximum of £2,500 for furloughed staff. From August, the government will still cover the cost of wages, but employers will be asked to pay employer national insurance and pension contributions – which Sunak said averages about 5 per cent of total employment costs.

Torsten Bell, chief executive of the Resolution Foundation, welcomed the gradual introduction of employer contributions. However, the think tank warned that even this small contribution could push some employers into having to make redundancies. “The one-size-fits-all approach will prove tough for hard-hit sectors, even with the initially low level of employer contributions,” Bell said. “Policymakers should prepare for significant redundancies among the two million hospitality workers currently furloughed.”

5.0 From September employers will contribute 10 per cent of wages

In the penultimate month of the scheme, the government will drop its contribution to 70 per cent of wages, with employers expected to contribute the other 10 per cent (if still paying staff 80 per cent of their wages rather than topping this up to 100 per cent), on top of national insurance and pension contributions. In October, the last month of the scheme, the government’s contribution will drop again to 60 per cent and employers will need to contribute 20 per cent of wages.

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PREVIOUS UPDATE – V1.7 23 April 2020

1. Introduction

  • On 20th March 2020, the Government announced that it would be introducing the “Job Retention Scheme”. The purpose of the Job Retention Scheme is to enable employers to retain staff who are not required to work for the foreseeable future, and who may therefore otherwise be laid off without pay or made redundant.  Under the Scheme, the Government has committed to paying staff 80% of their usual salary, up to £2,500 per month. Further guidance was issued by HMRC on 26 March 2020, 4 April 2020, 9 April 2020, 15 April 2020, 17 April 2020 and 20 April 2020. On 15 April 2020, the Treasury, in exercising the powers conferred by the Coronavirus Act 2020, gave a Direction to HMRC on the application of CJRS.
  • In order to access the Scheme, employers must “furlough” (or temporarily lay off) affected staff. The term “furlough” is new and refers to a process where staff can be retained as employees, but not undertaking any work. If staff are placed on furlough leave the period of furlough leave must be a minimum of 3 weeks. Employers will not be required to place staff on furlough leave for this whole three-month period but employers may choose to do so.   This will depend on whether they are needed to undertake their work during this period.
  • It is important to note that the Job Retention Scheme will operate by way of reimbursement. The employer will still need to pay staff in the first instance.
  • The whole process will be managed through HMRC. Applications for reimbursements can be made every three weeks (ie employers can’t claim weekly reimbursements).
  • The Coronavirus Job Retention Scheme is a temporary scheme which will run from the 1st March, 2020 until at least the 30th June 2020. It has been backdated to cover those employees who have already been made redundant who can now be reinstated and put on furlough leave.
  • The Treasury Direction provides that the employer must have created and started a PAYE payroll scheme on or before 19 March 2020, enrolled for PAYE online, that the PAYE scheme must have been registered on HMRC’s real time information system for PAYE (“a qualifying PAYE scheme”) on or before 19 March 2020 and the employer must have a UK bank account. This is a major change from the previous guidance which required employees to be on the payroll no later than 28 February 2020. The new guidance makes it clear that where there is public funding for staff costs, the expectation is that the scheme should not be used.
  • The scheme covers full-time and part-time employees, employees on agency contracts and flexible/zero-hours contract employees who were on a PAYE scheme on 19th March 2020 (provided HMRC were notified on an RTI submission on or before 19th March 2020). Any employees who were placed on unpaid leave after 28th February 2020 are still eligible to be furloughed. You can also furlough any employees who are following the shielding guidance and therefore absent for 12 weeks.
  • Employees hired after 19 March 2020 are not eligible for this scheme.
  1. How does it work?
  • An employing organisation (such as PCC, the ODBF and so on) need to decide which of their employees they are selecting for furloughed leave.
  • Furlough is likely to be appropriate where there is a reduction in work available and an employee would otherwise be at risk of being laid off or made redundant. Employees who are placed on furlough leave remain as an employee until work becomes available again and will continue to receive pay with the employer reclaiming up to 80% of each furloughed employee’s salary through HMRC (up to £2500 per month).
  • The employer may also choose to pay the remaining 20% of a furloughed member of staff’s salary notwithstanding that this cannot be reclaimed from HMRC. The Government guidance confirms that the employer will not be obliged to pay the additional 20%.   Careful consideration will need to be given to treat all staff fairly and consistently.
  • In addition to the reimbursement of 80% of salary the employer can reclaim associated employer NICs and minimum auto-enrolment pension contributions on that salary.
  • Employers cannot backdate the furlough leave period to 1st March for employees who have been working since then.
  • There must be an agreement in writing between the employee and employer in which the employee agrees to cease all work for the employer or its group. The instruction or agreement may be in electronic form, e.g. an email. This is a new requirement but is unlikely to disqualify a period of pre-existing furlough from the grant. As long as the agreement is in place before the employer claims for the employee this should be sufficient.
  • An employee with more than one part time job with different employers may be put on furlough leave from either or both jobs. In reality this is a scheme to protect employment. The position is unclear for employees with more than one post.
  • An employee must be furloughed for a minimum of three weeks and that three weeks can start any time during the duration of the scheme.  They can then come off furlough and return to work.  (This means that employers cannot rotate staff weekly between furlough and non-furlough).
  • There is no requirement to continue the employment of an employee who has been furloughed. Employers will need to decide whether employees will be able to return to their duties, or whether it will be necessary to consider redundancies. These will be subject to the usual rules on carrying out a fair dismissal.
  1. Can staff be `furloughed’ if they are absent from work already because they are ill, if they are working from home or on maternity leave?

3.1         Furlough should not be used as an alternative for sickness absence.  If someone is absent from work as a result of medical advice and self-isolation guidance and they are receiving statutory or contractual sick pay they should not be placed on furlough leave.   However, staff could be furloughed later when they are ready to return to work.

Statutory sick pay (SSP):

  • SSP will be payable from the first day of absence for an employee whose incapacity for work is related to coronavirus. This applies to any period of incapacity for work related to the coronavirus on or after 13 March 2020.
  • HMRC has been given the power to refund an employer’s payment of SSP in the above circumstances. HMRC will draft Regulations setting out the detail of this in due course.
  • The Chancellor announced on 17 March 2020 that funding would be available for employers who have less than 250 to recover two weeks’ SSP per each eligible employee.

3.2         Employees’ entitlement to statutory maternity pay is unaffected. However, employers who offer enhanced contractual maternity pay can furlough employees on maternity leave to receive support with the cost of that enhanced payment. This also applies for people on other types of similar leave (eg shared parental leave).

3.3         An employee must not be furloughed because they are on maternity leave. This could potentially amount to direct discrimination, for which there is no defence, and fair selection criteria should be adopted.

3.4         If staff are working remotely and there is work to do they should be retained and paid as normal.

3.5         Employees can be furloughed if they are shielding or having to remain at home because of childcare issues.

  1. How is the salary calculated?

4.1         The 80% salary is based on the higher of;

  • the same month’s earning from the previous year (for example if someone is furloughed in March this will be based on earnings from March 2019 if they are furloughed in April it will be based on earnings from April 2019 etc); or
  • the average monthly earnings in the 2019-20 tax year
  • Individuals will pay income tax and National Insurance Contributions as usual on any payments received as part of the JRS (via PAYE deductions made by their employer). Employees will also pay automatic enrolment contributions on qualifying earnings, unless they have opted out.
  • Employers will also need to pay Employer National Insurance Contributions, but as mentioned above, will be able to apply for a grant to cover this. The maximum grant will be calculated per employee and is the lower of:
    80% of ‘an employee’s regular wage’ and
    • £2,500 per month.

Plus the associated employers’ national insurance contributions (NIC) on this amount and the minimum automatic enrolment employer pension contributions on that wage.
Fees, commission and bonuses should not be included.
This gives a maximum cap of £2,500 +£245 (employers’ NIC) + £59 (auto-enrolled pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.

  • The government has stated furloughed employees can be paid the lower of 80% of salary or £2,500, even if it brings them below the national minimum wage.
  1. How are staff informed or consulted with them on being designated a furloughed worker?

5.1         There has been some debate about whether employers can impose the decision to furlough on their staff or whether it must be done with consent. The government has now confirmed that any decision must be discussed with staff and any changes made “by agreement”.  The guidance also states that “if sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment”. As a starting point staff need to be written to explaining who you have identified as furloughed and ask them to confirm their agreement to this in writing.   Should they not agree then it will be necessary to consult with them (over the telephone or video link) to understand their objections and if these can be overcome.  Ultimately then consideration will need to be given as to whether to simply notify them of the change of status or alternatively make redundancies.    Further advice should be sought at this stage.

5.2         Where all employees or whole teams or categories of staff are identified as not needed to work during this period then selection will be straightforward.   However, where a reduction in staffing is required with some staff continuing to work, the selection will be more complicated.  In these circumstances, a fair and objective selection process should be designed in order to justify the designation of all staff as either furloughed or working.  It might be appropriate to seek volunteers or alternatively have clear criteria.   In all cases, there should be a document that can be shared that sets things out clearly the rationale for furloughing staff, and if a selection has to be made, the basis for this.

5.3         The government has stressed that equality and discrimination laws will apply in the usual way when deciding who to furlough. So decisions about who or who not to furlough should not be based on a protected characteristic. No other guidance is given about how to go about selecting who to furlough suggesting the employer has discretion. Nevertheless, it is still likely to be sensible to try to establish a fair selection process and criteria, which in these times, may include consideration of those who fall within vulnerable groups or have additional caring responsibilities as a result of the coronavirus outbreak.

5.4         It has been clarified that employees can be furloughed more than once, ie furloughed, brought back to work for a period and then re-furloughed, provided that each furlough period is at least three weeks. This will allow employers to rotate employees on and off of furlough.

  1. Is anyone exempt from the scheme?
  • Yes, any employee appointed on or after 19th March 2020 is excluded from the scheme.
  1. What if a post has already been made redundant?

7.1         An organisation can re-employ people who have been made redundant since 19th March, and then place them on furlough leave as an alternative to dismissal.  It may be appropriate to consider redundancy for certain posts at a later date.

  1. What about annual leave?

8.1         The Government announced on 27 March that workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years.

8,2         Currently, almost all workers are entitled to 28 days holiday including bank holidays each year. However, most of this entitlement cannot be carried between leave years, meaning workers lose their holiday if they do not take it.

8.3         There is also an obligation on employers to ensure their workers take their statutory entitlement in any one year – failure to do so could result in a financial penalty.

8.4         The regulations will allow up to 4 weeks of unused leave to be carried into the next 2 leave years, easing the requirements on business to ensure that workers take statutory amount of annual leave in any one year.

8.5         This will mean staff can continue working in the national effort against the coronavirus without losing out on annual leave entitlement. The changes will also ensure all employers affected by COVID-19 have the flexibility to allow workers to carry over leave at a time when granting annual leave could leave them short-staffed in some of Britain’s key industries, such as food and healthcare.

8.6         Employees continue to accrue holiday pay as per their employment contract, however they can agree to vary holiday pay entitlement as part of a furlough agreement (this cannot drop below the statutory annual minimum).

8.7         Employees can take holiday whilst furloughed, although you can restrict when leave can be taken if there is a business need to do so. Any holiday pay needs to be paid at 100% of an employees usual pay (as per Working Time Regulations). If you are only paying employees 80% of their salary whilst furloughed, you will need to pay the additional 20% above the CJRS grant.

8.8         The guidance from the Government is still unclear as to whether employees can be required to take annual leave while furloughed.

8.9         If your employees usually take bank holidays as leave you will need to top these up to 100% of an employee’s usual pay or give them a day of holiday in lieu.

  1. Can an employee be furloughed whilst volunteering or training?

9.1         If undertaking online training whilst on furlough leave and the 80% paid is less than the NLW or NMW, then they must be paid the difference (up to NLW or NMW) for the time spent on training.

9.2         The current Government advice is: “A furloughed employee can take part in volunteer work if it does not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation.” That is less than clear for the parish context, so a common-sense approach is recommended as follows:

  • The employee should not undertake any of the duties in their role on a voluntary basis. The job description may not be very clear in all cases so care is needed.
  • They can volunteer to provide a service to others for duties outside their role
  • Therefore, a youth worker for example, could preach at an event but it must be clear that they are not doing so in the role. It is recommended both the volunteer and the incumbent/service organiser sign statements understanding this to be the case.
  • A separate statement should be signed on each occasion and should refer to the exact event.
  • The statement could say that it is understood that the contribution from the person is provided entirely in their capacity as an individual volunteer and in no way relates to any paid role with the parish.
  • The parish should keep those statements for five years in line with the Government regulations, and both parties should be advised of this when completing the form (for GDPR compliance).
  1. Anything else I should remember?

10.1       Furloughed absence is just a pause on day to day working whilst remaining on the payroll, so the person is still part of the organisation and should be kept up to date with news and information.

10.2       Any furloughed member of staff, and any member of staff off sick continues to attract all their usual employment rights, including the accrual of annual leave so there may need to be a plan of how that leave is then taken when things `get back to normal’ to avoid people all then being off at the same time!

10.3       Throughout any period of sick leave of furloughed absence please do remember that there is still a duty of care and issues of wellbeing, support and pastoral care that should be in place so that people still feel part of things.

  1. What about self-employed people?

11.1There are no steps to be taken here, HMRC will be in touch directly with a self-employed person as there is a specific earnings protection scheme for the self-employed. Details from the national church are included at Appendix 1.

11.2       You may receive queries or challenges from some of your workers about whether they really are self-employed, in which event you should seek advice.

  1. Do we need to continue to engage our agency staff?

12.1       The right to notice or notice pay is not a “relevant term and condition” for the purposes of the Agency Worker Regulations and therefore, there is no obligation on employers to provide comparable notice pay or notice to that of permanent employees.

12.2       You will be invoiced by the agency for their agency workers rather than paying them directly. The notice that needs to be provided to the agency to stop supplying the worker will be provided for in the contract between the agency and you. You should review the contract and should also check whether there are any clauses that provide for what happens in circumstances where schools are either wholly or partially closed. These clauses might use words like “force majeure” or “act of god”. You should take specific legal advice if they seek to rely on such clauses to terminate agency worker assignments earlier than they otherwise could.

12.3       The Government have now confirmed that the ‘Corona Job Retention Scheme’ is intended to cover agency staff as well as permanent employees, showing that there is an expectation that agency workers would be put on ‘furlough’ before any consideration to terminating their employment at this stage.

12.4       You should balance any rights to terminate agency worker assignments with public and employee relations considerations. You should also consider the relationship with the agency, as you will want to rely again on agency workers in the future.

  1. Employees with visas

13.1       The Scheme applies to employees with visas to work in the UK.

13.2       In relation to furloughed employees on Tier 2, 4 and 5 visas: UK Visa and Immigration (UKVI) confirmed on 3 April 2020 that employers who have temporarily reduced or ceased trading, can temporarily reduce the pay of their sponsored employees to 80% of their salary or £2,500 per month, whichever is the lower. Any reductions must be part of a policy to avoid redundancies and in which all workers are treated the same. These reductions must be temporary, and the employee’s pay must return to at least previous levels once these arrangements have ended.

13.3       Employers should, therefore, be able to seek an extension of stay for the Tier 2, 4 and 5 furloughed employees without an issue regarding the salary. Grants under the Scheme are not counted as ‘access to public funds’ which means that employers can furlough employees on all categories of visa.

  1. How will claims be made?

14.1       There is new HMRC guidance for employers to follow, which provides a step-by-step guide. The online portal opened on 20 April 2020. Until the grant comes through, employers will need to fund the furlough payments to their staff. Employers will be able to submit only one claim every three weeks, which is the minimum period of time for which an employee can be furloughed. Claims will be able to be backdated to 1 March where applicable.

  1. Is there further advice and guidance?

15.1       The situation surrounding Coronavirus is fast-moving and developing rapidly. The most recent information is on the government’s website at the following:

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/guidance-for-employers-and-businesses-on-coronavirus-covid-19

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

https://www.gov.uk/government/news/rules-on-carrying-over-annual-leave-to-be-relaxed-to-support-key-industries-during-covid-19

https://www.gov.uk/guidance/coronavirus-covid-19-information-for-the-public

https://www.acas.org.uk/coronavirus

The NCVO has a useful set of information here.  They have also made their members’ resources publicly available.

The Government advice on Furloughed workers here:

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees

15.2       Whilst the HR team at ODBF may be able to help with some enquiries for parishes, ACAS is the best resource. You should also check on the HMRC website and the Gov.uk website for more information.

There is national Church guidance here. 

APPENDIX 1

Support for Self-employed Workers (contractors, freelance workers etC.)

  1. The coronavirus (COVID-19) Self-employment Income Support Scheme

Overview

This scheme is analogous to the Coronavirus Job Retention Scheme. It allows someone who is self-employed to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month until the end of June.

Eligibility

Those who are eligible are those who are self-employed individual or a member of a partnership and:

  • have submitted an Income Tax Self-Assessment tax return for the tax year 2018-19;
  • traded in the tax year 2019-20;
  • are trading when they apply, or would be except for COVID-19;
  • intend to continue to trade in the tax year 2020-21; and
  • have lost trading/partnership trading profits due to COVID-19.

In addition, their self-employed trading profits must be less than £50,000 and more than half their income must come from self-employment.

Implementation of the Scheme

It is not possible to apply for this scheme yet. The Government have stated that HMRC will aim to contact those eligible by mid-May 2020 and invite them to claim using the GOV.UK online service and will then make payments by early June 2020.

This scheme will only be accessible via gov.uk If someone texts, calls or emails claiming to be from HMRC, saying that you can claim financial help or are owed a tax refund, and asks you to click on a link or to give information such as your name, credit card or bank details, do not click on the link or give the details as it will be a scam.

Points for noting

  • The grant will be subject to Income Tax and National Insurance contributions but does not need to be repaid.
  • You can make a claim for Universal Credit while you wait for the grant. You should record the grant as part of your self-employment income, and it may affect the amount of Universal Credit you get. This will not affect Universal Credit claims for earlier periods.
  1. OTHER SUPPORT

Deferral of Income Tax Payments on Account

The Government has announced that any self-assessment payments on account due by 31 July 2020 may be deferred until January 2021. This is an automatic offer with no applications required. No penalties or interest for late payment will be charged if you defer payment until 31 January 2021.

APPENDIX 2

Association of Christian Counsellors (ACC) – 5 June 2020

In response to the evident distress and suffering of many people as a result of the situation caused by COVID-19, the Association of Christian Counsellors (ACC) have set up a new COVID-19 Crisis Counselling Support Service. This service is for anyone in the UK, whatever their faith, who has been bereaved during the time of the epidemic and anyone working within an NHS setting in a frontline role who is eligible up-to ten sessions of counselling on a no-fee basis from a professionally trained counsellor.

Further information is available by visiting their website.