Coronavirus job retention scheme: latest guidance updates

Following on from last week’s Government announcement that the coronavirus job retention scheme will be extended until the end of October, on 14 May the Government made further minor changes to its guidance.

Non-discretionary payments for hour worked

The guidance Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme says when working out an employee’s regular salary or wage employers should include non-discretionary payments for hours worked, including overtime. A new section on non-discretionary payments states that when determining whether a payment is non-discretionary, an employer should only include payments which it has a contractual obligation to pay and to which the employee had an enforceable right. It also says variable payments specified in an employee's contract that are always paid may become non-discretionary, in which case they should be included.

The section on non-discretionary overtime payments says that where an employee has been paid variable payments due to working overtime, employers can include these payments when calculating 80% of their wages as long as the overtime payments were non-discretionary.

Payments for overtime worked are non-discretionary when the employer is contractually obliged to pay the employee at a set and defined rate for the overtime that they have worked.  This suggests that the key issue is whether the employer is obliged to pay for the overtime worked, not whether the overtime itself is compulsory or guaranteed.

Extension of the job retention scheme

The updated employer guidance reflects the extension of the job retention until the end of October and the fact that from August employers currently using the scheme will have the flexibility to bring furloughed employees back to work part-time and still receive grants under the scheme.   

The updated guidance says that from August to the end of October 2020, employers will be asked to pay a percentage towards the salaries of their furloughed staff and confirms further information on this will be made available by the end of May.

Volunteering

The employer guidance has been amended to make it clearer that an employer cannot furlough their employees and then ask them to volunteer for them in the same or a different role.

New guidance 

The section in the employer guidance on which employees an employer can claim for has been moved to new guidance - Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme

The example of how to calculate 80% of an individual's salary or wages have been moved from the 80% guidance to new guidance - Examples of how to work out 80% of your employees' wages, National Insurance contributions and pension contributions