On 15 April 2020, the Government published its fourth iteration of its guidance on the Coronavirus Job Retention Scheme (the “Scheme”) with updates on individuals eligible for the Scheme and a new qualification date, which has now changed from 28 February 2020 to 19 March 2020. The qualification date is the date when an employee must have been on the employer’s PAYE payroll to be eligible for the Scheme.
The original guidance stated that an employee had to be on the payroll on 28 February 2020 to be eligible. The guidance now states: “You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.”
The aim of this change is to enable individuals who fell outside the Scheme, perhaps because they had recently moved jobs to a new employer and were not on their payroll as of 28 February 2020, to now be eligible.
The qualification date was included in the Scheme to prevent businesses from making fraudulent claims by hiring ‘ghost employees’ in order to claim furlough payments. However the new qualification date should still prevent fraudulent claims being made while bringing more employees in scope; in order to be eligible for the Scheme the employee must have been on the employer’s PAYE payroll on or before 19 March 2020, which was just before the Scheme was announced.
The treasury has also issued adetaileddirection to HMRC on 15 April 2020 under powers conferred to it under the Coronavirus Act 2020. It is the most detailed guidance released on how the Scheme will work and is an important source of information. The direction can be found here:
Clause 6.7 of the direction states in relation to furloughed employees that “an employee has been instructed by the employer to cease all work in relation to their employment only if the employer and employee have agreed in writing (which may be in an electronic form such as an email) that the employee will cease all work in relation to their employment”.
This suggests that “written agreement” by both employer and employee is now required to qualify under the Scheme. Employees already put on furlough, where there is no written agreement between the two parties that the employee will cease all work, may not fall within the requirements of the Scheme.
There are other clarifications set out in the Direction. For instance, the Scheme is not limited to those employees who would otherwise be made redundant. The Scheme applies to any employees who are furloughed "by reason of circumstances as a result of coronavirus or coronavirus disease" (clause 6.1(c)). This is broader than previously thought. There is also guidance on what is meant by regular salary and wages; e.g. performance related bonus and discretionary payments do not count as regular salary or wages and cannot be claimed.
More information about the Coronavirus Job Retention Scheme and Furloughed Employees can be found in our full article about the Scheme (linked below), which is continually updated in light of new guidance. We still await guidance on annual leave whilst on furlough leave and will continue to post regular updates as more information is released, so do keep an eye out.
‘The Coronavirus Job Retention Scheme and Furloughed Workers’ article: https://www.curzongreen.co.uk/about-us/articles/525-the-coronavirus-job-retention-scheme-furloughed.html