Employer NIC’s and pensions contributions paid by?CJRSEmployerEmployerEmployer
CJRS contribution to wages80% up to £2,50080% up to £2,50070% up to £2,187.5060% up to £1,875
Employer contribution to wages10% up to £312.5020% up to £625
Total80% up to £2,50080% up to £2,50080% up to £2,50080% up to £2,500


Holiday continues to accrue while an individual is furloughed, and employees can take holiday during a period of furlough without the holiday bringing the furlough period to an end. Note that it is open to the employer and employee to agree to vary holiday entitlement as part of the furlough agreement, subject to the minimum statutory entitlement of 5.6 weeks. BEIS issued new guidance on holiday entitlement during coronavirus, including in respect of those workers who have been furloughed, on 13 May 2020.

The guidance clarifies that under the Working Time Regulations 1998 (WTR) holiday must be paid at the individual’s normal rate of pay (or calculated on the basis of the average pay received by the individual over 52 weeks, if the rate of pay varies). This means that employers must ‘top up’ the 80% furlough grant so that the individual receives 100% of their usual pay during any period of holiday. 

The BEIS guidance also suggests that employers can require workers to take holiday during a period of furlough by giving notice, but qualifies this by stating that “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”. This is potentially unhelpful, since it provides no clear guidance on whether holiday taken during furlough will qualify as annual leave within the meaning of European working time rules. The guidance itself has no legal effect, so an employment tribunal will reach its own conclusion if this point is challenged at a later date. 

The Working Time Regulations 1998 have recently been amended to allow for the carry over of annual leave for two years in respect of holiday that workers are unable to take due to the COVID-19 crisis and an employer will have to have a reasonable reason to refuse any future holiday requests. Employers of certain key workers or in businesses that are facing a significant increase in demand may want to defer holiday for those workers during the current period, and can consider giving notice to employees to cancel any pre-booked periods of holiday. The guidance sets out the factors employers should take into account in deciding whether it is not reasonably practicable for a worker to take some or all of the statutory basic four weeks’ annual leave. Employers may also consider deferring holiday if they are unable to fund the 20% difference between furlough pay and holiday pay (but note, the worker is entitled to be paid in full for any accrued but untaken holiday on termination). If holiday is carried forward, employers should give workers the opportunity to take holiday at the earliest practicable opportunity. The Acas guidance on holiday and leave during coronavirus is clear that employers should still be encouraging workers to take paid holiday throughout the year if possible. 

Making a claim

The Government has published a step-by-step guide for employers on making a claim through the HMRC portal, together with guidance on the details needed to make a claim.

Employers must provide HMRC with a number of details relating to each furloughed employee and calculate the amount to be claimed. To submit a claim employers need:

From 1 July 2020, claim periods under the Scheme must start and end within the same calendar month, due to the fact that the Scheme rules (and the employer’s contribution) will change each month. Each claim must cover a period of at least seven calendar days, unless the claim includes a shorter ‘orphan period’ of days falling at the beginning or end of a month. Claims for periods ending on or before 30 June must be submitted by 31 July 2020.

HMRC will retain the right to retrospectively audit all aspects of the claim, and may withhold payments or require them to be repaid in full if the claim is based on dishonest or inaccurate information or found to be fraudulent. Employers should therefore retain all records and calculations used in respect of any claim for at least six years.

If an employer makes an error in a claim that has resulted in an over-claimed amount, this must be paid back to HMRC. The amount over-claimed can be declared as part of a future claim, which will then be reduced to reflect the overpayment. Otherwise, employers are required to contact HMRC to arrange repayment. 

Pension contributions

The Pensions Regulator published new guidance for employers on automatic enrolment and pension contributions in light of COVID-19. This confirmed that the automatic enrolment duties continue to apply to those staff who are furloughed. From 1 August , employers are required to pay auto-enrolment pension contributions (as well as employer NICs) as these will no longer be funded under the Scheme. Any contributions exceeding the statutory minimum (3%) are not funded by the Scheme. 

Calculation of the claim

HMRC issued separate detailed guidance on calculating how much you can claim together with example calculations and an online calculator, to assist in calculating claims, including in respect of those on flexible furlough In summary this is as follows:

The self-employed

Self-employed individuals are not covered by this Scheme but the Government introduced a separate scheme to assist a significant number of the self-employed by paying a lump sum of up to 80% of their earnings (calculated by reference to their earnings set out in their tax returns for the 2018/19 tax year and capped at £2,500 per month). Those self-employed who have earned in excess of £50k for the 2018/19 tax year will not qualify. The self-employed scheme is now open for online applications for those who are eligible; claims must be made by 13 July 2020. Those who are eligible and who have claimed by 13 July in respect of the first grant, will be able to make a further claim in August 2020. The Government has indicated that grants will be paid within six working days of the application. 
Further details of the Self-employment Income Support scheme are available here.

Looking ahead

Employers who have elected to furlough any part of their workforce should ensure they are complying with all the necessary requirements and, crucially, plan ahead for what might happen when the Scheme comes to an end.

The Government is now actively encouraging workers to return to work if their workplace is open. See our previous article on returning to work.

Please contact your usual Birketts employment lawyer for advice on the law and the procedures you will need to follow. We will continue to monitor the Job Retention Scheme closely going forward and provide further details when they are available.

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