14 Apr 2020
The Government has qualified that owner/directors of business, who are paid (in full or in part), through PAYE can qualify. This only applies to monies paid through PAYE and to the extent that directors/owners pay themselves by way of dividend, only PAYE salary can be taken into account. Unlike ordinary employees, the guidance recognises that directors have statutory duties and that these can continue to be fulfilled. However, directors cannot fulfill obligations concerned with the generation of commercial revenue. This will, for example, allow the owners of personal service companies to obtain some benefit from the JRS.
The Government has also confirmed that salaried members of an LLP can be furloughed and receive payment through the scheme.
The Government guidance also suggests that workers and individuals who might be considered to be employees, for statutory employment law purposes, also qualify. This is potentially relevant to those individuals to those working in the gig economy.
The Government guidance indicates yes. This will, however, be subject to any restrictions under the individual’s contract of employment. For example, a contract of employment may restrict an individual for working for a competitor and it is unlikely that an employer will be willing to permit its employees to work for a competitor.
While Government guidance indicates that all regular payment an employer is obliged to make are to be taken into account in the calculation of furlough pay, non-monetary benefits, for example, medical insurance, cannot be included. Regular payments will include wages, any overtime already completed, fees and compulsory commission payments. Discretionary bonuses and commission cannot be included Unless otherwise contractually agreed, non-monetary benefits will continue through furlough leave. This would include, for example, the continued provision of a company car unless the employer reaches a contractual agreement with the employees to temporarily cancel those benefits.
The Government has reacted to concerns raised as to employees who had recently moved jobs being excluded from the Job Retention Scheme. Updated guidelines issued yesterday extend the Scheme to individuals employed on or before 19th March, the day prior to the JRS scheme being announced.
The Guidance now states that “You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020. Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.”
Employers should continue to monitor Government guidance for updates. Should you require any further guidance or assistance with advice on issues relating to Coronavirus please do not hesitate to contact our Head of Employment Daniel Wilde on 01633 244233, who can provide bespoke advice tailored to the needs of your business.
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