Coronavirus Job Retention Scheme – Updated Guidance

6th April 2020

The Government have updated their guidance on the Coronavirus Job Retention Scheme (CJRS) originally published on 26 March 2020. The key elements of the CJRS as at 4 April 2020 are set out below, with additions and changes highlighted, by italicized text or highlighting new sections.

Employers should read the guidance document in full to understand all the elements of the scheme to date, appreciate the employee relations implications and identify those parts where legal advice is needed.


If employers cannot maintain their current workforce because their operations have been severely affected by coronavirus (COVID-19), they can furlough employees [place them on leave of absence] and apply for a grant that covers 80% of the employees usual monthly wage costs, up to £2,500 a month, plus the associated Employer NI contributions and minimum automatic enrolment employer pension contributions on that wage. This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period. It is designed to help employers retain their employees and protect the UK economy.

Who can make a claim?

Employers must have:

  • created and started a PAYE payroll scheme on or before 28 February 2020
  • enrolled for PAYE online – this can take up to 10 days – New
  • a UK bank account

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.

Public sector organisations

The Government expects that the scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak. In a small number of cases, for example where organisations are not primarily funded by the Government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.


Where a company is being taken under the management of an administrator, the administrator will be able to access the CJRS. However, an administrator should only access the scheme if there is a reasonable likelihood of rehiring the workers – New.

Who is eligible


Employers can only claim for furloughed employees that were on their PAYE payroll on or before 28 February 2020.

Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts.

Foreign nationals are eligible to be furloughed – New category.

An employee cannot undertake work for, or on behalf, of the organisation. This includes providing services or generating revenue. Employers are free to consider allocating any critical business tasks to staff that are not furloughed – New.

Employees made redundant or who stopped working after 28 February

If employers made employees redundant, or they stopped working for the employer on or (New) after 28 February 2020, employers can re-employ them, put them on furlough and claim for their wages through the scheme.

Employees working reduced hours

If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for the CJRS.

Employees on unpaid leave

Claims can only be made for employees that started unpaid leave after 28 February 2020.

Employees self-isolating or on sick leave

Employees on sick leave or self-isolating are able to get SSP, but employers cannot claim for them while they’re getting SSP. However, they can be furloughed and claimed for once they are no longer receiving SSP.

Shielding Employees

Employers can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding – Newif they are unable to work from home and you would otherwise have to make them redundant – New.

Employees with caring responsibilities – New category

Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.

Employees with more than one job

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. Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages – New.

Employees on fixed term contracts – New category

Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. Where a fixed term employee’s contract ends because it is not extended or renewed you will no longer be able claim grant for them.

Employees doing volunteer work

A furloughed employee can take part in volunteer work, if it does not provide services to or generate revenue for, or on behalf of the employer’s organisation. The employer can agree to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance – New.

Employees undertaking training – New reworded section

Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation. Furloughed employees should be encouraged to undertake training.

Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time. In most cases, the furlough payment of 80% of an employee’s regular wage, up to the value of £2,500, will provide sufficient monies to cover these training hours. However, where the time spent training attracts a minimum wage entitlement in excess of the furlough payment, employers will need to pay the additional wages.

Employees on maternity leave, adoption leave, paternity leave or shared parental leave

The normal rules for maternity and other forms of parental leave and pay apply. Employers can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for either: maternity pay, adoption pay, paternity pay or shared parental pay.

[Note that this wording which appeared in the 26 March guidance has been omitted: “If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme. The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.” It is assumed that the Government did not consider this needed to be stated explicitly because it is implicitly included in the make up of the employee’s wage.]

Apprentices – New category

Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed. However, Apprentices must be paid at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training. This means employers must cover any shortfall between the amount they can claim for their wages through this scheme and their appropriate minimum wage. Guidance is available for changes in apprenticeship learning arrangements because of COVID-19.

Eligible individuals who are not employees – New category

As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE: office holders (including company directors), salaried members of Limited Liability Partnerships (LLPs), agency workers (including those employed by umbrella companies) and limb (b) workers [self-employed people who are paid via PAYE]. Specific considerations for these individuals are set out in the Guidance.

Contingent workers in the public sector – New category

The Cabinet Office has issued guidance on how payments to suppliers of contingent workers impacted by COVID-19 should be dealt with where the party receiving the contingent worker’s services is a Central Government Department, an Executive Agency of a Central Government Department or a Non-Departmental Public Body – Read more information on contingent workers impacted by COVID-19.

Individuals – New category

Individuals can furlough employees such as nannies provided they pay them through PAYE and they were on their payroll on, or before, 28 February 2020.

Furloughing employees

Agreeing with employees

Employers do not need to place all their employees on furlough.  Employers should discuss furlough arrangements with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the wage grant employers must confirm in writing to their employee that they have been furloughed. A record of this communication must be kept for five years – New.

Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

Employees still have the same rights at work, while being furloughed including: SSP, maternity and other parental rights, rights against unfair dismissal and redundancy payments.

Employees will still pay the taxes and NI contributions they normally pay out of their wages. This includes pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension.

When the government ends the scheme, employers must make a decision, depending on their circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

Minimum furlough periods

Any employees placed on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times but each separate instance must be for a minimum period of 3 consecutive weeks (New), which appears to allow for rotation of furloughed employees.

Working for a different employer – New section

If contractually allowed, employees are permitted to work for another employer whilst they have been placed on furlough. For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C.

What can be claimed

General principles

Employers can claim for:

  • 80% of each employees’ wages (even for employee’s on National Minimum Wage) – up to a maximum of £2,500. Do not claim for the worker’s previous salary – New;
  • minimum automatic enrolment employer pension contributions on the subsidised wage.

Employers can choose to top up the employee’s salary, but they do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up salary – New.

Grants will be prorated if the employee is only furloughed for part of a pay period – New.

Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they written to confirming their furloughed status – New.

Full or part time employees on a salary

Claim for the 80% of the employee’s salary, as of 28 February 2020, before tax.

Employees whose pay varies

If the employee has been employed for 12 months or more, employers can claim the highest of either the:

  • same month’s earning from the previous year; or
  • average monthly earnings for the 2019-2020 tax year.

If the employee has been employed for less than 12 months, employers can claim for 80% of their average monthly earnings since they started work. If the employee only started in February 2020, employers should work out a pro-rata for their earnings so far and claim for 80%.

Employer National Insurance and Pension Contributions

Employers still need to pay employer NI and pension contributions on behalf of your furloughed employees, and they can claim for these too. Employers cannot claim for:

  • additional NI or pension contributions you make because they chose to top up an employee’s salary
  • any pension contributions made that are above the mandatory employer contribution

Past Overtime, Fees, Commission, Bonuses and non-cash payments

Employees can claim for any regular payments they are obliged to pay their employees. This includes wages, past overtime, fees and compulsory commission payments (New – not previously included). However, discretionary bonus (including tips – (New)) and commission payments and non-cash payments (New) should be excluded.

Benefits in Kind and Salary Sacrifice Schemes – New section

The reference salary should not include the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay should also not be included in the reference salary. Where the employer provides benefits to furloughed employees, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme. Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC agrees that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

Apprenticeship Levy and Student Loans – New section

Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.

National Minimum Wage

Individuals are only entitled to the National Living Wage (NLW)/National Minimum Wage (NMW)/ Apprentices Minimum Wage (AMW) for the hours they are working or treated as working under minimum wage rules. This means that furloughed workers who are not working can be paid the lower of 80% of their salary or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage.

However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020. As such, employers will need to ensure that the furlough payment provides sufficient monies to cover these training hours. Where the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time.

Where a furloughed worker is paid close to minimum wage levels and asked to complete training courses for a substantial majority of their usual working time employers are recommended to seek independent advice or contact Acas – New.

Making a claim and status of grants

  • The guidance sets out all the details need to make a claim. Employers need to calculate the amount they are claiming. HMRC will retain the right to retrospectively audit all aspects of a claim.
  • Employers should make their claim using the amounts in their payroll – either shortly before or during running payroll. Claims can be backdated until the 1 March where employees have already been furloughed (New).
  • If appropriate, worker’s wages should be reduced to 80% of their salary within the payroll before they are paid. This adjustment will not be made by HMRC (New).
  • HMRC will check the claim, and if the employer is eligible, pay it to them by BACS to a UK bank account.
  • Employers must pay the employee all the grant received for their gross pay, no fees can be charged from the money that is granted.
  • Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.
  • Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.
  • Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

Note: The online to be used to make a claim is not available yet. It is expected to be available by the end of April 2020.

Should you have any further questions or require any assistance with your employment arrangements during this difficult period, please do not hesitate to contact either one of our Co-Heads of the Employment team, Partners Tamara Ludlow and Ewan Keen