UK: 4 April updates to Coronavirus Job Retention Scheme guidance

On 4 April HMRC added to their guidance on the Coronavirus Job Retention Scheme.  The additional text does clarify a few of the questions as to how HMRC intend the scheme to operate, although inevitably some remain.  The main changes are:

• in what appears now to be a condition of accessing the scheme, the guidance states that "If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant"
• clarification that the scheme can be used by various types of worker who are not classed as employees for employment law but are on payroll: office holders including directors, LLP salaried members, agency workers employed by umbrella companies and "limb(b) workers"
• confirmation that employees on payroll on or before 28 February, but who had been made redundant or stopped working for the employer after that date, can be rehired and put on furlough
• confirmation that employees who have been placed on furlough can take on work for another (unconnected) employer
• confirmation that employees can be placed on furlough multiple times (subject to a minimum of 3 consecutive weeks each time)
• further detail that the reference salary (for the purposes of reclaiming 80%, subject to the £2,500 per month cap) is post-salary sacrifice and that it can include "any regular payments [employers] are obliged to pay" including "past overtime, fees and compulsory commission payments" but should exclude "discretionary bonus (including tips) and commission payments and non-cash payments"
• a note that employers must also have enrolled for PAYE online, which can take up to 10 days, as they will need an ePAYE reference number.

Issues that have not yet been clarified in the HMRC guidance include:

• the position where employees TUPE-transfer to a new employer after 28 February and so were on the transferor's payroll as at that date (meaning that the transferee cannot furlough them); a Treasury tweet suggests that transferees will be able to use the scheme in these circumstances
• the extent to which an employer could require an employee to take their accrued holiday entitlement during a period of furlough - Acas has changed its guidance on this but questions remain.

Updated versions of our briefings reflecting the updated HMRC guidance and discussing the remaining questions are available here:

• COVID-19 People: Key issues for UK Employers
• COVID-19 People: Coronavirus Job Retention Scheme

The third in our series of webinars discussing the business challenges presented by the COVID-19 outbreak is covering People: The challenges being faced and takes place tomorrow, Tuesday 7 April at 10.30 UK time.  We will be looking at a number of the key issues currently being faced by UK employers, and the government support that may be available. Among other things, we shall consider key questions for management, including in relation to:

• handling employee sickness, holiday and self-isolation;
• the challenges around home working;
• government financial assistance for temporary work stoppage: the UK government's Job Retention Scheme (including coverage for pension contributions); and
• collective redundancies and alternatives for cutting costs (including the scope for employers to reduce or defer pension contributions).

The webinar will be chaired by James Palmer, Chair and Senior Partner of Herbert Smith Freehills, who will be joined by expert colleagues who will share their experience and views on these issues.

Further details, including how to register to attend the webinar, are here.