On 20 March 2020 the Chancellor announced the introduction of the Coronavirus Job Retention Scheme (CJRS).
This will be available for employers in the UK which businesses have been affected by the Covid-19 and they are therefore unable to offer work to their employees.
With such scheme, the Government will pay 80% of salaries up to a maximum of £2,500 per month, to all those employees that would other be laid off or made redundant. Please note that you can, but the government does not require you to pay the outstanding balance of 20%.
The scheme will run for three months from 1 March 2020 but could be extended.
In order to be eligible for the grant, you will have to comply with some formalities. In particular, the government requires you to change the status of those employees that would otherwise be made redundant to “furloughed worker”.
Once identified who would be at risk of being laid off or at risk of redundancy you should:
- Check whether you have the right to ‘lay-off’ the employee in their employment contract;
- If not, this needs to be consented by the employee and properly documented;
- You may want (but are not obliged) to top-up the employee’s salary to match their normal remuneration;
- After that you’ll have to submit the relevant information to HMRC via a new online portal – which has not yet gone live.
Our firm can support you to access the CJRS. In particular, we can assist with:
- the review of the employment contracts of those employees that you are considering making furloughed workers; and
- the draft of an agreement between your business and the furloughed workers which complies with the CJRS’s requirements.
Please do not hesitate to contact Ezio La Rosa (ezio.larosa@belluzzo.net) for any further questions.
