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ADVICE

The STUC has updated its advice on the new Coronavirus Job Retention Scheme*. It’s good news for many. Your unions have negotiated a real boost in these critical times. Join one today!

But the scheme doesn't work the same way for everyone and there is still more we need to do to make sure everyone gets the support they need. Our priority is making sure employers do the right thing and continuing to press government to update the scheme, or take other additional action to look after those who fall through the cracks.

There are still some things we are trying to find out. You can email us at info@stuc.org.uk asking to be kept updated or return to this site regularly.

(Your data will be treated confidentially, consistent with data protection rules and will only be used for the purposes of giving information or seeking your views on this subject)

Coronavirus Job Retention Scheme

The UK Government originally announced that the Coronavirus Job would run for at least 3 months from 1 March 2020, said that they would extend the scheme if necessary. They have now announced that it will run to at least the end of June.

This scheme enables a PAYE registered employer that cannot cover staff costs due to the coronavirus to claim 80% of staff costs for each employee who they furlough.

If your employer intends to access this Coronavirus Job Retention Scheme and to furlough you, they should discuss what this will mean in practice for you and to take a number of other steps.

I have been told I have been ‘furloughed’. What does this mean?

In most cases, you are classified as a furloughed worker IF you meet the following 3 conditions:

• You have been enrolled for PAYE since at least 19 March 2020 AND you were paid through the payroll at least once in or before that date (we discuss this is further detail later)

• You are told that you will be kept on your employer’s payroll

• You will not be undertaking any work for your employer

You cannot undertake work for your employer whilst you are furloughed. You may however be able to undertake training as part of your work

This furlough process allows your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

If I am furloughed, am I still employed?

You are still employed even though you have been furloughed. Your employer could fund the 20% difference between the furlough payment and your salary, but they are not required to. If your salary is reduced as a result of these changes, you may qualify for support though the welfare system, including Universal Credit.

Does this apply to me whatever kind of contract I have with my employer?

Yes. You can be on any type of contract, including:

• full-time employee

• part-time employee

• some agency workers (those who qualify as ‘employees’ of either the agency, the end user or both)

• employees on flexible or zero-hour contracts

Do I need any evidence of being furloughed?

No, but your employer must write to you to confirm you have been furloughed. The latest government guidance suggests you should also confirm agreement. IT IS VERY IMPORTANT TO RECEIVE YOUR UNION’S GUIDANCE ON THIS. if you don’t have a union follow the guidance in our action section. Make sure you keep a record of all communications.

Self-employed workers

There is a very important distinction between an employee and someone who is considered self-employed. Employers do not need to pay self-employed workers through PAYE – so someone who is classed as self-employed will not be eligible for this scheme. Self-employed workers must make an application instead through the UK Government’s coronavirus (COVID-19) Self-employment Income Support Scheme.

How will I know I am on the PAYE System?

If you are on the PAYE system you will have a tax code.

If you are given a PAYE tax code, it will be shown on:

• a notice of coding sent by your tax office

• your pay slip

Employers usually have to pay employees through PAYE if the employee earns £118 or more a week (£512 a month or £6136 a year).

Employers do not need to pay self-employed workers through PAYE.

How do I know I’m an employee?

This is a complex area of the law but as a general rule, you are:

• an employee if you work for someone and do not have any of the risks associated with running a business

• self-employed if you run your own business and are responsible for its success or failure. Employees are paid on a Pay As You Earn (PAYE) basis, which means tax and National Insurance Contributions (NICs) are usually automatically deducted.

I am still working, does it apply to me?

No. Your employer cannot furlough you and ask you to work. This also applies to you if work for an agency.

My hours have been reduced, does this scheme apply to me?

No. If you are still working, but on reduced hours, or for reduced pay, you are not eligible for this scheme and your employer will have to continue paying you through the usual payroll, and pay your salary subject to the terms of your employment contract.

If your employer has unilaterally reduced your hours as a result of the coronavirus, this should have been discussed and agreed with you. If you are unhappy with how this happened please speak to your union rep. If you are not a member of a union you can contact info@stuc.org.uk to find out which union you can join. You can also contact Thompsons Solicitors by email at Talk@TalkToThompsons.com.

I am not working because I am a ‘shielded’ employee or have caring responsibilities can I be furloughed?

Yes. Employees who are unable to work because they are shielding in line with public health guidance (or need to stay home with someone who is shielding) can be furloughed. 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.

I have been made redundant since 28th February

The scheme also covers employees who have been made redundant since 28th February 2020, if they are rehired by their employer. Speak to your former employer and refer them to the Coronavirus Job Retention Scheme and tell them they can furlough workers instead. employer

I was an employee who didn’t receive my first salary until after the 19th March 2020 can I be furloughed?

The government recently changed its guidance. You will need to have received at least one salary payment from your employer. If this was on or before 19th March 2020 your employer may furlough you. The new guidance says that employers wanting to furlough a worker must have submitted a Real Time Information (RTI) submission to the HMRC in relation to that worker. This must have been submitted on or before 19th March 2020. The employer cannot apply for the scheme for any worker it made an RTI submission for after that date. If you were paid after that date you should check with your employer when they made the RTI submission for that pay period.

Although the cut-off date has changed from 28th February to the 19th March, the revised guidance states that if, based on 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), the employer can choose to still use this calculation for their first claim.

I am a zero hours worker. What does this scheme mean for me?

If you are on a zero hours contract; you meet the definition of ‘employee’ and you are earning more than an average of £118 per week under that contract (known as the Lower Earnings Limit), then you will be on the PAYE system.

The scheme covers everybody who was on the PAYE system through a company on or before 19th March 2020.

I am an agency worker can I be furloughed?

  • If you work or have recently been working on an agency contracts, you can be furloughed, provided that you are paid through PAYE. This includes those working for Umbrella Companies.

  • If you are on the payroll of the agency, rather than the organisation you have been working for, it is the agency that can put you on furlough. This can be done only if the you are not doing any work for the agency and were on the agency's payroll on 19 March 2020 (or on 28 February 2020 if you are rehired and furloughed, after the termination date).

  • If you are or have been on the payroll of the organisation you have been working for, it is the organisation who may furlough you.

  • If you are self-employed but your agency acts as a work finder, you cannot be furloughed either by your organisation or your agency.

I am on a fixed term contract can I be furloughed?

If you have a fixed term contract you can be furloughed. Your contract can be renewed or extended before its natural conclusion during the furlough period without breaking the terms of the scheme. But if your contract ends because it is not extended or renewed before its natural conclusion you will no longer be able claim grant for them once the contract ends. Fixed term contracts which ended, without extension or renewal, on or before 19 March 2020 will not qualify for the grant once they have ended

I am employed as a member of a Limited Liability Partnership can I be furloughed?

Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme.

I am a Limb (b) Worker, can I be furloughed?

If you are a Limb (b) Workers are are paid through PAYE, you can be furloughed and receive support through this scheme.

How will my furlough pay be calculated?

The normal way of calculating your salary for furlough will be to base it on your salary in February 2020

The 80% furlough pay can include previous overtime, fees and compulsory (contractual) commission. But it cannot include tips, discretionary bonuses and commissions or benefits in kind such as health insurance.

If your salary varies month-by-month, your employer can claim the higher of your same month’s earnings from the previous year; or your average monthly earnings for the 2019/2020 tax year.

If you only started working in the month before March 19 2020 then you are entitled to a pro rata calculation of your earnings so far.

Your employer than has to work out National Insurance contributions and the minimum auto enrolment employer pension contributions that can be claimed.

Will I still get at least the National Living Wage/National Minimum Wage?

Not necessarily. Furloughed workers will be paid the lower of 80% of their salary, or £2,500 even if, based on your usual working hours, this would be below National Living Wage/National Minimum Wage. IF you are an apprentice you must be paid at least the Apprentice Minimum Wage by your employer.

What about my annual leave?

If your the employment contract continues during the furlough then employees’ rights in terms of annual leave will be unaffected. So employees are permitted to take pre-arranged annual leave while furloughed.

You are entitled to be paid “normal remuneration” for the first 4 weeks of annual leave. Your employer must pay you 100% of your normal salary. Employers should still be able to claim the 80% back.

You cannot be furloughed if you are on unpaid leave, unless you were placed on unpaid leave after 28 February, in which case you should contact your employer to ask them to make an application to the Coronavirus Job Retention Scheme.

Sickness absence

The Government guidance is still not clear on all aspects of sickness absence.

The updated guidance says if you are currently off sick you can be furloughed for business reasons.

This applies to both short-term and long-term sick leave. If this has happened to you, you would then no longer receive sick pay and should be paid the same as other furloughed employees.

However, we are cautious here because the guidance also says that furlough is not intended for short-term absences from work due to sickness, and that short-term illness or self-isolation should not be a consideration in deciding whether to furlough an employee. We are seeking further guidance of this.

If you’re on sick leave or self-isolating because of coronavirus (COVID-19), speak to your employer about whether you’re eligible to be furloughed – you should get Statutory Sick Pay (SSP) as a minimum while you are on sick leave or self-isolating. If your employer furloughs you at any time, you will no longer receive sick pay, but should be treated as any other furloughed employee.

If you become sick while on furlough, it is up to the employer to decide whether to move you onto SSP or to keep you on furlough. If you remain on furlough, the employer can continue to claim your salary through the furlough scheme. But if you are moved onto SSP, the employer will have to pay this. If you have returned to work from sick leave after 19 March. Your furlough should be calculated using your normal pay not what you received while on sick leave.

I have more than one job. Does this scheme apply to me?

If you have more than one employer, you can be furloughed for each job. Each job is separate, and the cap of £2,500 applies to each employer individually.

My employer has asked me to undertake some training while I am furloughed. What happens to my income?

If you are required to undertake training, for example completing an online training course, while you are furloughed, then you must be paid at least the National Living Wage/National Minimum Wage for the time spent training, even if this is more than the 80% of your wage that will be subsidised.

I am on Maternity Leave, contractual adoption pay, paternity pay or shared parental pay. What happens to my income under this scheme?

Individuals who are on or plan to take Maternity Leave must take at least 2 weeks off work (4 weeks if they work in a factory or workshop) immediately following the birth of their baby. This is a health and safety requirement. In practice, most women start their Maternity Leave before they give birth. If you are eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and you are entitled to claim up to 39 weeks of statutory pay or allowance.

Employees who qualify for SMP, will still be eligible for 90% of their average weekly earnings in the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the statutory flat rate (whichever is lower). The statutory flat rate is currently £148.68 a week, rising to £151.20 a week from April 2020. If your employer offers enhanced (earnings related) contractual pay, 80% of these costs can be claimed through the job retention scheme. The same principles apply if you qualify for contractual adoption, paternity or shared parental pay.

I am not on the PAYE System but I have no work due to the impact of the coronavirus. Do I qualify for 80% of my salary?

Unions have been fighting for extension of coverage to you. Self-employed and freelance workers can now claim for financial support to make up for lost earnings, in a similar way to people who are employed. But this is not through the Coronavirus Job Retention Scheme.

Our latest guidance on that can be found here.

Can my employer charge me a fee for paying me through the new scheme?

No. If you are furloughed, your employer must pay you the full 80% of what you are entitled to under the new scheme. However, your employer can choose to pay you more.

When my employer decided who to furlough, I think my employer has discriminated against me because of my sex/age/disability/gender reassignment/race/religion or belief/sexual orientation/marital status/pregnancy and maternity status. What can I do?

Equality and discrimination laws apply in the usual way, including to your employer’s decisions about who to offer furlough to.

If you think you have been discriminated against, please speak to your union rep.

If you are not a member of a union you can contact info@stuc.org.uk to find out which union you can join.

You can also contact Thompsons Solicitors by email at Talk@TalkToThompsons.com.

Do my rights at work change if I am furloughed?

No. If you have been furloughed, you have the same rights as you did previously, including Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.

Will I still have to pay tax and other usual deductions?

If you have been furloughed, your wage will be subject to usual income tax and other deductions. You will also pay automatic enrolment pension contributions on qualifying earnings, unless you have chosen to opt-out or to cease saving into a workplace pension scheme.

What happens to my pension while I am furloughed? Employers can claim for 80% of your furloughed usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. The UK Government will provide more guidance shortly about how the pension contributions will work. But 80% of my salary is not enough to live on… If you have been furloughed you might find that the 20% reduction in your salary means that your earnings meet the eligibility threshold for Universal Credit or you may find that you qualify for other benefits.

You need to make a claim for this.

From 6 April the Government are increasing the standard allowance in Universal Credit and the basic element in Working Tax Credit for 1 year. Both will increase by £20 per week (on top of planned annual uplifts). This will apply to all new and existing Universal Credit claimants and to existing Working Tax Credit claimants. You should also ask your employer to make up the 20% shortfall from their own funds. There is nothing to prevent them from doing this!

How much Universal Credit might I get?

How much you receive (called the UC Standard Allowance) depends on whether you are single or claiming as a couple. It also depends on your age. There is one standard allowance for your household:

• Single claimant aged under 25: £251.77 per month

• Single claimant aged 25 or over: £317.82 per month

• Joint claimants both aged under 25: £395.20 per month

• Joint claimants either aged 25 or over: £498.89 per month

Please note: As from 6 April the Government are increasing the standard allowance in Universal Credit and the basic element in Working Tax Credit for 1 year. Both will increase by £20 per week (on top of planned annual uplifts).

This will apply to all new and existing Universal Credit claimants and to existing Working Tax Credit claimants.

However, you might also be eligible for 'additional elements' such as childcare or housing costs. You can obtain further information from the UC helpline: 0800 328 5644. You can also obtain advice from your local Welfare Rights Officer - they can be found working for your Local Authority or perhaps a Housing Association. The Citizens Advice Bureau is also a good source of information - they have people dedicated to assisting with UC claims:

https://www.cas.org.uk/helptoclaim

Universal Credit is means tested and paid based on earnings – this means that it is calculated at the same rate regardless of whether you are a worker, self-employed or an employee.

*Nothing on our site or provided in any email response to an individual enquiry, constitutes legal advice or is intended to give rise to a legal relationship between the STUC and any individual. Specialist legal or other advice should always be sought and taken in relation to your specific circumstances. The contents of our site and/or this email are intended for general information purposes only and you should not rely on them as definitive in relation to your situation.

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