UPDATED: The Coronavirus Job Retention Scheme – what does it mean for employers?

March 24, 2020


On 20 March 2020, the UK Government announced the introduction of the Coronavirus Job Retention Scheme for all UK employers, regardless of their size or sector, provided they had a PAYE scheme in place on 28 February 2020.

The scheme will help employers to carry on part-paying salaries for those employees who otherwise would be “laid off” due to the Coronavirus crisis. These employees could now be kept on the employer’s payroll, preventing potential redundancies and periods of unpaid lay-off.

The scheme will be backdated to 1 March 2020 and run for three months, with a potential extension, if necessary.

Employers will need to decide which employees will be “furloughed”, notify them of this change to their employment, and then inform HMRC via a new online portal which has not yet gone live. In return, HMRC will reimburse employers 80% of the furloughed employees wages, up to a maximum of £2,500 per employee per month. Employers can top-up the 80% salary payment from HMRC but they are not obliged to do this. Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding.

The Government clarified the scheme on 26 March 2020 and here are some of the key points, some of which had not previously been announced:

  • Employers can reclaim up to 80% of wage costs up to a cap of £2,500 plus (not including) the associated employer NICs and minimum automatic enrolment employer pension contributions on that wage.

  • Full-time employees, part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts are all eligible for the scheme provided they have been on the employer’s PAYE payroll on 28 February 2020.

  • 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. However, an employee who is on furlough leave can not undertake work for on or behalf of the employer that has provided them on the furlough leave, if they work for even an hour, they are not eligible.

  • For employees whose pay varies, the employer can claim for the higher of (a) the same month’s earning from the previous year; or (b) average monthly earnings from the 2019-20 tax year.

  • Normal employment law applies to furlough employees who agree to the changes.

  • Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February. Employees on SSP or self-isolating cannot be furloughed either, but can be furloughed afterwards.

We are still awaiting further guidance on the mechanics of claiming furlough pay in due course, but the scheme is expected to be up and running by the end of April.



Contact Our Team
Catherine Burke
View Profile
Damian Phillips
View Profile
Fflur Jones
Managing Partner
View Profile
Gareth Wedge
View Profile
Mark Rostron
View Profile
Nick O’Sullivan
View Profile
Owen John
View Profile
Rhodri Lewis
View Profile
Stephen Thompson
View Profile

I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”

Becs Beslee, Dice FM Ltd

Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”

Rebecca Cooper, ACT Training

We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”

Karen Gale, Stepping Stones Group

An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”

Gwawr Booth, Portal Training Ltd

PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”

Ledia Shabani, Property Support Services UK Ltd

We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”

Guto Bebb, Farmers’ Union of Wales

Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”

Iwan Hywel, Mentrau Iaith Cymru

My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”

Margot Adams, Guarding UK Ltd