Following our previous update, yesterday (15 April 2020), HMRC has issued a further update to its employer and employee guidance on the Job Retention Scheme (the Scheme). We now have the following recommendations:

1. The eligibility date, being the date when the employee has to have been on the employer's payroll to qualify for the Scheme, has changed from 28 February to 19 March 2020. This means that a large number of employees who started employment after the 28th February will now qualify for the Scheme and this may be helpful for businesses that employ seasonal employees (many of whom started work in the first week of March).
2. To claim for an employee that has been furloughed, the employer and employee must have agreed in writing that the employee will cease all work. This is an important clarification and could impact those employers who have already furloughed employees.
3. In light of this change, the date for calculating the reference salary of salaried employees has also changed to the 19th March 2020. However, the revised guidance provides that if, based on the previous guidance, an employer has calculated their claim based on the employee’s salary as at 28 February 2020, and this differs from their salary in their last pay period prior to 19 March 2020, an employer can choose to still use this calculation for their first claim.
4. The position for those on unpaid leave has been clarified. If an employee started unpaid leave after 28 February 2020, they can be placed on furlough. However, if an employee started unpaid leave on or before 28 February 2020, they cannot be furloughed until the date on which it was agreed they would return from unpaid leave.
5. There is also guidance on how the required employee information should be submitted to HMRC and the guidance confirms that an employer should retain all records and calculations in respect of their claims. The Treasury Direction contains complex and detailed rules on eligibility and conditions for the Scheme, together with comprehensive information on how claims should be submitted and how HMRC will process them. Employers will need to give careful consideration to how their arrangements comply with these new rules as well as the updated guidance, mindful that the online portal is expected to be open on Monday 20 April for April claims.

As well as the above, the following points, which we have previously highlighted, will continue to apply:

• Employers will be able to apply to HMRC for a grant to cover the lower of 80 per cent of an employee’s regular wage or £2,500 per month plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions for employees who are not working but are “furloughed” and kept on payroll, rather than the individual losing their job
• The Scheme covers any UK organisation with employees including businesses, charities, recruitment agencies and public authorities (although there is a clear expectation that employers who receive public funding for staff costs won’t furlough their staff if they have received public money for the role).
• While initially it had been proposed for any employee who would have otherwise been made redundant as a result of coronavirus, it has now been extended to those “affected” by the virus, meaning an employee shielding because of the health of a family member, or an employee who has had to take time off of work because they are now caring for children as schools are closed, would be eligible to be furloughed.
• Employees must be furloughed for a minimum of three weeks.
• Employees who are furloughed cannot undertake work for the employer who has furloughed them but can take part in volunteer work or training. If the contract of employment allows for it, of if the employer agrees, the employee can take on another job while on furlough.
• If an employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
• The Scheme will cover the cost of eligible employee’s wages, backdated to 1 March 2020 and for at least three months going forward.
• Employers can choose to “top up” the salary of those employees on furlough (to bring them up to 100% of their salary), but are not obliged to do so under the terms of the Scheme.
• An employee on furlough can be paid less than the national minimum wage without legal risk as long as they do not undertake any training for their employer during furlough.
• There will be no limit on the amount of funding available to the Scheme.
• It is not a condition of the grant under the Scheme that employers have an overall freeze on redundancies — furloughed (or other employees) can still be made redundant subject to existing employment law. However, the Government’s aim by introducing the Scheme is to avoid redundancies, but this may still have to happen in some businesses.