Up until the end of June 2021, the CJRS (Coronavirus Job Retention Scheme), will remain at the government funding 80% of an employee’s hours not worked. From July 2021, the Government will introduce an employer contribution towards the cost of unworked hours. However, there are some changes from 1 May 2021, which will affect employee’s eligibility for the scheme.
Changes from May
Do you have employees who have previously been ineligible for the CJRS? From 1 May 2021 onwards, they may now be eligible for the scheme!
From May you will be able to claim for eligible employees who were on your PAYE payroll on 2 March 2021 – meaning you must have made a submission to HMRC to state they are on your payroll up to 2 March 2021.
HMRC previously advised that employees must be on the payroll at 30 October 2020, therefore any employees who you could not claim for before who started working for you between 1 November 2020 – 2 March 2021, you will now be able to.
Variable Pay
For periods from 1 May, when calculating the average wages for employees who are not on a fixed salary, you should no longer includes period of:
The above applies if your employee was not on one of these types of leave for the entire period.
Holiday Leave – CJRS
Many clients have queried how holiday pay works if an employee is currently on furlough, therefore we have detailed the HMRC guidance below on taking holiday leave whilst on furlough –
“Workers on furlough can take holiday without disrupting their furlough. The notice requirements for their employer requiring a worker to take leave or to refuse a request for leave continue to apply. Employers should engage with their workforce and explain reasons for wanting them to take leave before requiring them to do so.
If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.”
Please note, if a furloughed employee takes holiday, they are entitled to receive 100% of their pay as opposed to the 80% furloughed rate. As an employer, you would need to top up the extra 20%.
“Workers who have been placed on furlough continue to accrue statutory holiday entitlements, and any additional holiday provided for under their employment contract.”
If you have any questions in regards to furlough and holiday pay, do not hesitate to pick up the phone to us on 01724 848343! Or email our payroll department, payroll@ssmithaccountants.co.uk.
