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Coronavirus (COVID-19): The latest government guidance on the Coronavirus Job Retention Scheme (CJRS)


The Coronavirus Job Retention Scheme (CJRS) was first announced on 20 March 2020 to help businesses cope with the economic impact of coronavirus.

The Coronavirus Job Retention Scheme (CJRS) was first announced on 20 March 2020 to help businesses cope with the economic impact of coronavirus. Under the CJRS, HMRC will reimburse employers 80% of wage costs of employees who have been furloughed up to £2,500 a calendar month for each employee, plus the associated employer national insurance and minimum auto-enrolment pension contributions on the capped amount.

Since 20 March 2020, the government has released a significant amount of additional guidance and also a HM Treasury Direction to provide further information on the availability and implementation of the CJRS.  The latest updates are outlined below.

Extension of the Coronavirus Job Retention Scheme

The CJRS has been extended until the end of June 2020. The government has said it will extend the CJRS further, if necessary.

Payroll cut-off eligibility date

Initially, only employees who were on their employer’s payroll on 28 February 2020 could be furloughed, which meant that employees who started a new job after that date could not be furloughed. That date has now be changed to 19 March 2020, which enables new employees to be eligible for furlough. The government guidance states that being on an employer’s payroll for these purposes means that an RTI submission notifying payment in respect of an employee must have been made to HMRC on or before 19 March 2020.

If an employee was on the payroll on 28 February 2020 but left employment before 19 March 2020, they can be furloughed if they were re-employed (before or after 19 March 2020).

Salary reference date

For employees with a fixed salary, the salary reference date for the purposes of calculating furlough pay was initially 28 February 2020, but this has been amended to the last pay period before 19 March 2020. However, if the employer has already calculated the employee’s salary using the 28 February 2020 date (as per the previous guidance) it can use this calculation for the purposes of its first furlough claim.

For employees with variable pay (for example, employees who receive overtime or commission) who have been employed for less than 12 months, the employer should claim for 80% of the employee’s average monthly earnings from their start date to the date they were/are furloughed. Where an employee on variable pay has been employed for less than a month before they are furloughed, their furlough pay should be calculated on a pro rata basis.

The government has published the following guide to assist employers in calculating the wages that can be claimed under the CJRS:

Employees returning from statutory leave

The latest guidance confirms that employees returning from statutory leave (which includes, but is not limited to, maternity, paternity and sick leave) can be furloughed. When an employee returns from statutory leave then their normal salary should be used to calculate their furlough pay instead of the salary that they received whilst on statutory leave.

Taking holiday

Holiday entitlement will continue to accrue during furlough and employees who have been furloughed can request and take holiday in the usual way, if their employer agrees. This includes bank holidays. Furloughed employees are entitled to receive their full pay for any holiday that they take.

Written agreement

In order to claim under the CJRS, employers must write to employees confirming that they have been furloughed. Employers do not need to obtain any written responses from employees to claim the CJRS but employers should still ensure they comply with all aspects of employment law including whether the employment contract imposes the need for written consent.

*The information set out in this article is correct at the date of publication (21 April, 2020). The effect of coronavirus on businesses is a fast-changing area and so it is important to obtain legal advice to ensure you are properly protected.

Contact us

If you have any questions regarding the impact of the Coronavirus upon your business or are seeking up-to-date legal advice on Employment Law, contact Alice Toop on 01202 294 566 or email [email protected].   

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