By Alan Price, employment law and HR expert at BrightHR
The highly anticipated HMRC Coronavirus Job Retention Scheme online portal is now open. Some had been sceptical about whether HMRC would be able to stick to its target release date of 20 April 2020, however, it has been achieved. It is now expected that thousands of employers will use the portal to claim back the 80% wages available for employees they have designated as ‘furloughed’.
A Step by Step guide for claiming money via the scheme is also available and points out that employers will need their Government Gateway ID and password to log in. Once logged in, it seems that employers will have to put their details in all in one go because there is no ‘save’ option available within the portal. This means employers must be fully prepared, at the start, with details they will need to input for the claim to be processed. With that in mind, here are six things employers need to be mindful of when applying for the scheme.
- Do your research on government offerings
Make sure you know what the Government are offering and how long they are offering it for. Currently, the scheme covers the period from 1 March 2020 up until the end of June. Before deciding to rely on the scheme, consider if your company, and your staff, are eligible for it.
- Check if your employees are eligible
To be eligible, the individual must be PAYE and must have been on the payroll on 19 March 2020 and have been notified to HMRC through a RTI submission on or before 19 March 2020. Full time, part time, temporary and zero hours and fixed term staff can all be included as long as they are PAYE. Office holders, (including directors), salaried members of LLPs, agency workers and those who fall into the employment status category of ‘worker’ can be included.
Previous guidance had contained a cut-off date of 28 February 2020 meaning that employers could not furlough, and claim the wages of, anyone who started after this date. The guidance was updated on 15 April 2020 to provide a new cut-off date of 19 March 2020.
- Communicate with employees about changes
You must clearly tell staff that they are being furloughed, why this is, and when this will take place. It should also be confirmed if you are willing to let them work for someone else while they are away and that you will expect them to return when the period of furlough ends.
- Log all employee communications
Unless there is a term allowing furlough in employees’ contracts, you will need to get agreement from employees to designate them as furloughed and reduce their pay. You will need to agree on the pay reduction with employees as part of the agreement to furlough because normal employment law principles apply.
On 15 April 2020, the Government released a Treasury Direction on the scheme. It stated that employers must have an agreement in writing that the employee will cease to do all work for the duration of furlough.
- Read the small print
Make sure you are clear on anything that could impact on your use of the scheme. For example, the guidance update on 15 April 2020, extending the scheme to staff who had been with the company on or before 19 March 2020, did not actually permit as many new individuals to benefit from it as previously thought. This was because an RTI submission will need to have been made to the HMRC first, which happens on payday, and staff who started at the beginning of March may not yet have been paid.
- Play by the rules
Payments may be withheld or need to be repaid if claims were based on misleading or inaccurate information or found to be fraudulent. A hotline has also been set up on which employees can report employers’ abuse of the system.