Even though we are approaching the end phase of the Coronavirus Job Retention Scheme, the Government continues to make important announcements about the scheme which have significant implications for employers. See our summary below for an overview of recent developments.
Calculation of a week's pay
On 30 July, the Government announced that new legislation would be brought in to ensure that furloughed employees who are made redundant will receive redundancy pay based on their normal pay, rather than their furlough pay under the Coronavirus Job Retention Scheme which is often less. The changes will also apply to notice pay and to basic awards for unfair dismissal claims.
The Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 came into force on 31 July and implement these changes.
The Government had already confirmed on 17 July that employers can continue to claim for a furloughed employee who is serving a statutory or contractual notice period, but furlough grants cannot be used to substitute redundancy payments.
New guidance for employers who have claimed too much or not enough from the Coronavirus Job Retention Scheme
On 28 July, new guidance was published for employers who have over-claimed or under-claimed when using the Coronavirus Job Retention Scheme.
Where an employer has claimed too much, they must pay this back to HMRC. This can either be done as part of the next claim (which will be reduced) but if no other claim is being submitted the employer needs to contact HMRC to make the payment. Significantly, where an employer has over-claimed and not repaid it, they must notify HMRC by the latest of either:
- 90 days after the date they received the grant they were not entitled to
- 90 days after the date they received the grant that they were no longer entitled to keep because their circumstances changed
- 20 October 2020
Failure to do this could result in having to pay a penalty. The guidance above links to other new guidance about what factors HMRC will take into account when assessing the amount of the penalty and how to appeal against a penalty.
Coronavirus Job Retention Scheme Bonus
It was almost a month ago when the Chancellor announced a Job Retention Bonus in his “Plan for Jobs”. The Government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. For more details on the bonus see our previous article.
On 31 July, the Government published further details about the bonus and these include an overview of the scheme, which employers are eligible to apply and who counts as “qualifying employees”. Where a claim for an employee was incorrectly made, the bonus will not be payable.
More details about the process for claiming the bonus will be published by the end of September.
Finally, just as a reminder, from 1 August, employers are required to pay the employer NICs and employer pension contributions on furlough pay.
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