Coronavirus Job Retention Scheme

31 March 2020


The Coronavirus Job Retention Scheme (CJRS) is a new scheme launched by the UK government to help UK business deal with the unprecedented challenges they are facing as a result of the Coronavirus pandemic as an alternative to widespread redundancies.

The scheme will allow eligible organisations to claim for the cost of:

· 80% of a furloughed employee’s (an employee on a leave of absence) 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.

Crucially this is the Gross figure and wages would still be subject to income tax, employee national insurance contributions and any automatic pension enrolment contributions as usual.

Employers can choose to ‘top-up’ these amounts to reflect an employee’s full pay, but any such contributions would not be funded through the scheme.

Who can claim?

Workers must have been on a PAYE payroll scheme as at 28 February 2020 to be eligible.

Provided these workers were on payroll, any UK organisation with employees can apply, including businesses, charities, recruitment agencies (with agency workers paid through PAYE) and public authorities.

Who is eligible?

Any employee, regardless of the type of their employment contract can be covered by the scheme, including:

· full-time employees;
· part-time employees;
· employees on agency contracts;
· employees on flexible or zero-hour contracts; and
· employees who were made redundant after 28 February 2020 if they are subsequently rehired.

Employees must be furloughed completely for at least 3 weeks and not undertake any services for the business – organisations can only claim for those employees not working at all.

Employees can be furloughed more than once during the scheme – this can either run for consecutive periods or with the employee returning to work in between. As above, any further furlough period must also be for a minimum of 3 weeks.

It is important to remember that a company has discretion over who to place on furlough – there is no need for the entire workforce to be furloughed.


The CJRS will be open from 1 March 2020 for at least 3 months.

The scheme will open for applications at some point to be confirmed in April – currently HMRC anticipates this will be by ‘the end of April 2020’.


As with any change to the terms of an employee’s employment contract, any period of furlough will need to be agreed with the employee and recorded in an agreement, detailing (at the very least):

· when the period of furlough starts;
· how long the employee will be furloughed for (and whether this will end early dependent on any extension or not of government funding);
· the amount of pay the employee will receive; and
· how to remain in touch throughout the furlough period.

Applications will be able to be made up to a maximum of once every three weeks (to reflect the minimum period of furlough) via on online portal – full details and the information required to claim is available here.

In line with good practice, full and accurate records should be kept surrounding the furloughing of any employee should HMRC require audit access to your company accounts as HMRC will be able to claw back any amounts fraudulently claimed.

Frequently asked questions:

Q: Will employees accrue holiday whilst furloughed?

A: Yes, employees will accrue holiday whilst furloughed – it may be preferable that an employee be required to take holiday pro rata as part of a furloughed period. Whilst the guidance from the government is unclear on this point, any leave accrued prior to any furlough period should likely be paid at 100% of salary.

Q: Must I pay furloughed workers the national minimum wage or the national living wage?

A: Employees must only be paid the national minimum wage/national living wage whilst actually working. Payment to employees does not need to be ‘topped up’ if, based on their usual working hours, 80% of salary or £2,500 would cause the employee to fall below the relevant minimum wage. The only exception to this is when a furloughed employee is required to undertake mandatory training or continuing professional development requirements etc. – they should be paid at least the relevant minimum wage for the time spent completing this.

Q: How much can I claim for a worker who works variable shifts with a varying number of hours?

A: If your employee has been employed for the full twelve-month period prior to your claim, you can claim for the higher of either:

· the same month’s earning from the previous year; or
· average monthly earnings from the 2019-20 tax year

The government guidance indicates that if the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work. However, if the employee only started in February 2020, you can base any claim on a pro-rata calculation of their earnings so far.

Q: One of my employees is on a company sponsored visa – how will furloughing such a worker affect their visa?

A: Guidance on this point from the government is unclear at present. Under a Tier 2 sponsored visa, such employees will have specific salary requirement. Whilst currently there is nothing to indicate such an employee could not be furloughed (subject to the usual requirements to keep the Home Office updated about such a worker’s employment) employers must be careful not to pay less than the amount stipulated by the Home Office for that particular worker, otherwise the visa may be cancelled. We would suggest approaching on a case by case basis and seeking advice where appropriate.

Whilst due care has been taken to ensure the contents of this note are accurate as at the date of creation (30 March 2020), given the rapidly developing circumstances the contents of this note are not intended to constitute legal advice and should not be relied upon as such. If you have any further questions on the topics raised please do get in touch with us via email at

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