Skip to content

The Coronavirus Job Retention Scheme


The Coronavirus Job Retention Scheme is open to all UK employers to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month per employee. The scheme will run for at least 3 months, backdated from 1 March 2020, but will be extended if necessary. The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020.


Any UK organisation with employees can apply. This includes charities, recruitment agencies and public authorities. The government does not expect many public sector employers to use the scheme as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the Coronavirus outbreak.

Furloughed employees must have been on the payroll on 28 February 2020 and can be on any type of contract. This includes full-time employees, part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts. With agency employees, the scheme is only available for agency employees who are not working. The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.

If an employee is working, but on reduced hours, or for reduced pay, they are not eligible for the job retention scheme. The employer will have to continue paying the employee through their payroll and pay their salary subject to the terms of the employment contract you agreed.

Employers must be mindful not to discriminate in deciding who to offer furlough too.  Equality and discrimination laws will continue to apply in the usual way. The issue of seeking to protect vulnerable workers has not been specifically covered in the guidance.

To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.


There are specific issues that must be considered if an employee is on unpaid leave, on Statutory Sick Pay, has more than one job or takes part in volunteer work or training. For example, employees on sick leave or self-isolating should get Statutory Sick Pay but can be furloughed after this.

Employees on maternity (or similar) leave can continue to draw SMP (or similar) payments and the normal rules continue to apply for up to 39 weeks.

Employers need to make a claim for wage costs through the job retention scheme. Employers will receive a grant of up to the lower of 80% of wage costs or a capped £2,500 per month, plus the associated employer NICs and minimum automatic enrolment pension contributions on that subsidised wage.  Fees, commissions and bonuses are not included.

An employer can choose to top up to 100% but does not have to under the scheme. Employers need to be mindful of any contractual entitlements.


Where an employee has varied pay, the employer can claim for the higher of the same month’s earning from the previous year; or average monthly earnings from the 2019-20 tax year.

Individuals are only entitled to the minimum wage for the hours they work.  So, if they are furloughed and do not work, and 80% of their normal earnings would take them below the minimum wage based on their normal working hours, they still only receive 80% as they are not working.  However, they are entitled to be paid NMW for any time spent training.

Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding. Claims can be backdated until the 1 March if applicable, but employers can only claim once every three weeks.

HMRC expects the new online service to be available by the end of April 2020.

This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top