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Coronavirus Job Retention Scheme Updated Q&As

Use our CJRS Q&As to keep abreast of the latest Government announcements, the second Treasure Direction published on Friday 22 May and HMRC guidance. The law stated is at 22 May. We expect further amendments from week commencing 25 May and our Q&As will be updated to reflect these.


The CJRS has been extended to 31 October 2020 and formal announcement is awaited this week on how much employers will have to pay towards the cost of furloughed employees.

For specific advice on all Covid-19 related issues for your organisation please contact Simon Quantrill or Katherine Sheerin.

The Coronavirus Job Retention Scheme (CJRS) has proved a life line for many employers and has avoided mass redundancies, so far. The CJRS has been extended to 31 October 2020 and further changes to the scheme rules are anticipated this week. The Times on Saturday reported that from August, employers will have to pay 25% towards the costs of furloughed employees’ salaries but employers will be allowed to ask employees to work part-time whilst furloughed. This will be a welcome relaxation of the existing ban on all work related activities.

Our updated Q&A explains the key changes to the CJRS rules introduced in the second Treasury Direction to HMRC issued on Friday 22 May – already it is out of date as it only refers to the scheme running to 30 June. A third direction must be on its way!

At Quantrills our key advice remains to Communicate, Consult and Secure Consent from all affected employees. By keeping them on side you will minimise disputes and upset. Each week Simon Quantrill and Katherine Sheerin have advised and guided multiple employers on how to solve the many grey areas and unknowns that the CJRS has thrown up. We remain impressed and proud of how our clients have responded to the challenges caused by the coronavirus and how they all want to do the best they can for their staff.


Simon, you have been brilliant - Your furlough help and guidance has been spot on. Thank you so much.

A thank you message from employer client to Simon given on Friday 22 May 2020

Coronavirus Job Retention Scheme | Law as stated on 22 May 2020

In the main this second Treasury direction covers a number of technical issues and provides improved clarity on the following areas:

Training | This must be to improve the employee’s effectiveness in the employer’s business, or to improve the performance of the employer’s business. New clause 6.8 makes it clear that the training must not in any way amount to work or contribute to the business activities of the employer’s business.

Payments to employees | New clause 7.12 makes it clear that employers do not need to make a payment to employees in advance of claiming reimbursement under the CJRS provided they intend to pay employees within a reasonable time of receipt of the grant.

TUPE | Under clause 9.4, the date by which an employee must have transferred under TUPE in order to be eligible for furlough has changed from 19 March to 28 February 2020. Plus new provisions at clauses 9.6 to 9.12 cover furlough and TUPE.

Need for furlough agreement | clause 6.7 has removed the need for each employee to agree in writing to be furloughed. However there is now a need to have a furlough agreement in place with each employee or via a collective agreement and this must be in writing (this includes by email). The agreement must be incorporated into the employees’ contract of employment.

Costs of employment | Clauses 7.1 to 7.19 provide more detail about what is included in an employee’s regular salary or wages that can be included in a claim under CJRS.

The direction does not confirm the CJRS will continue to 31 October 2020 but only states the end date as 30 June. This means more updates will no doubt confirm the extension of the scheme to end of October and how employers will start to contribute towards the cost of furlough from August.

Clause 6.7 of the second Treasury Direction requires each furloughed employee and the employer to have a written furlough agreement that:

  • must agree the employee will cease all work for the employer
  • specifies the main terms and conditions upon which the employee will cease all work
  • is incorporated (expressly or impliedly) in the employee’s contract; and
  • which is retained by the employer until at least 30 June 2025.


Whilst full details and guidance are still awaited, it is understood from the press release dated 12 May 2020 that from August 2020:

  • Employees will be able to return to work on a part-time basis.
  • Employers will be required to pay a percentage towards salaries of their furloughed employees (anticipated to be at least 25%); and
  • The employer’s payments will substitute the 80%/£2,500 contribution under the CJRS.

The above changes may require employees to issue amended or new furlough agreements to furloughed employees.

For employers with fewer than 250 employees, they can claim for coronavirus related Statutory Sick Pay for employees who:

  • had or have coronavirus
  • could not or cannot work because they were/are self-isolating at home
  • were/are shielding in line with public health guidance.

Full details about the scheme is here.

On 20 March 2020 Government announced that all employers regardless of size or sector, could apply for a grant from HMRC to cover 80% of the wages of its employees subject to a cap of £2,500 per employee per month, provided they keep the worker employed. In addition employers can claim the associated employer national insurance contributions and employer auto-enrolment pension contributions.

Claims can be backdated until 1 March where employees have already been furloughed.

As from Monday 20 April employers can submit claims using the online portal. HMRC has issued a pdf step-by-step guide on how to do this.

The scheme has been extended now to last at least until 31 October 2020. The objective of the scheme is to help employers avoid having to lay-off staff on no pay or make them redundant.

Latest HMCR guidance now states that, “Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they written to confirming their furloughed status.”

Yes, the scheme is open to all employers with a PAYE scheme regardless of size, sector including the public sector, local authorities and charities. Public sector employers are not expected to use the scheme whilst central Government continues to fund salaries etc. Non-public sector organisations who receive funds to provide public services are also expected not to furlough their staff.

The scheme covers employees and workers provided they were on the employer’s PAYE payroll on 19 March 2020 (this date was originally 28 February but was changed on 15 April) and includes full-time, part-time and flexible and zero hours employees and PAYE workers. Apprentices can be furloughed but they can continue to train whilst furloughed – but they must be paid the NMW or NLW for all time spent training.

You can only claim for employees, however, who have been on your employer’s PAYE payroll before or on 19 March 2020 and notified to HMRC on an RTI submission on or before 19 March 2020. This means you must have made an RTI submission notifying payment in respect of all employees to HMRC on or before 19 March 2020. This rule is to prevent fraudulent claims for ghost employees that unscrupulous employers may have tried to claim for post the original launch announcement on 20 March by the Chancellor of the Exchequer.



Yes, you can furlough any employee. The CJRS is not limited to employees at risk of being dismissed for reason of redundancy. The Treasury Direction to HMRC confirmed on 15 April that any employee can be furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease.” Anti-abuse provisions are included in the CJRS to catch claims that fall outside of this definition but one wonders how well it can or will be policed.

The latest Updated Government guidance published on 14 May 2020 explains the latest criteria. The original requirement that stated employers needed to designate affected employees as ‘furloughed workers’ and confirm this in writing and for this record must be kept for five years has been superseded by the second Treasury Direction – see above question on the need for a Furlough Agreement.

Furlough means in effect employees are on a leave of absence from work. Employees who go onto furlough leave must stay at home and must not do any work for the employer who has furloughed them.

Normal employment law continues to apply so you must secure employees’ consent to being furloughed. You must follow good HR practice that includes communicating and consulting with affected employees about your plans and the reasons why you wish to furlough them and on what terms.

The online portal opened on Monday 20 April 2020 and claims will be paid within 6 working days. The latest HMRC guidance published on 11 May 2020 on how to make a claim including what information you will need is here.

The minimum period is three consecutive weeks during which time furloughed employees must stay at home and do no work at all for their employer. Employees can take holiday whilst furloughed and this will not break the three week rule.

You do not need to place all your employees on furlough.

Employees can be furloughed multiple times, but each separate instance must be for a minimum period of three consecutive weeks. Increasingly many clients are rotating employees on and off furlough.

The short answer is in most cases no. This is because you still have to make sure you don’t end up with a breach of employment contract or unlawful deductions of wages claim. You need to get the consent of every employee you want to put onto furlough leave. This is best done by consulting with your employees and getting them to sign a letter confirming their consent to the change in status. In practice almost all employees are going to cooperate given the alternative is likely to be unpaid lay-off or redundancy.

It is a requirement of the CJRS that each employee must sign a furlough agreement confirming the terms and conditions of the furloughing and that the employee “will cease all work”.

We now have extensive experience of drafting bespoke furlough agreement letters for employers that take into account their specific arrangements and furlough rules. Please contact Simon Quantrill at [email protected] if you would like help implementing furlough leave for your organisation.


If you have already furloughed employees, please check all letters/agreements used do comply with the above requirements.

Yes, workers who you pay via your UK PAYE payroll are covered but they must have been on the your PAYE payroll on 19 March 2020. Such workers are often described as PAYE Workers. As with employees the big problem is that in addition to qualify the employee must have already been paid and been included on a real time information (RTI) submission on or before this date. This requirement is causing lots of disappointed for may employees as they now find themselves excluded from being furloughed under the CJRS.

The scheme is being back dated to 1 March 2020. Latest HMRC guidance now states that, “Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they written to confirming their furloughed status.”

The scheme also covers employees who were employed as of 28 February 2020 and on payroll (ie 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. They also qualify for the scheme if the employer re-employs them and puts them on furlough.

Employees hired after 19 March 2020 cannot be furloughed or claimed for under the scheme.

HMRC’s guidance published on Saturday 5 April 2020 stated:

“As well as employees, the grant can be claimed for any of the following groups, if they are paid via PAYE, office holders (including company directors) salaried members of Limited Liability Partnerships, agency workers (including those employed under umbrella companies [and] limb (b) workers. The updated guidance includes specific considerations for each type of individuals who are paid via PAYE but who are not necessarily employees in employment law.”

On 15 April the Direction to HMRC confirms that a director who is furloughed can only undertake work to fulfil a duty or other obligation arising from an Act of Parliament. This is a restricted limitation and relates to such work as the filing of company accounts. The second Direction, published on 22 May, now adds that work undertaken by a director must be disregarded if it relates to making a CJRS claim for employees or for paying employees’ salary or wages.

For the latest HMRC guidance dated 11 May 2020 see here for its step-by-step guide. Plus on 22 May 2020 the second Treasury Direction at clauses 7.1 to 7.19 now provide must greater clarification on what can be claimed.

The scheme provides a maximum grant (not a loan) per employee and is the lower of 80% of wages or £2,500. Wages is defined as “all employment costs up to a cap of £2,500 per month”. In addition you can claim for employer’s national insurance contributions and auto-enrolment pension contributions based on the reduced pay.

Normal PAYE deductions must be made from the payments to employees. Fees, commissions and bonuses are not included. Government is going to issue more guidance on how employers should calculate their claims for employer’s national insurance contributions and minimum auto-enrolment employer pension contributions.

The HMRC guidance restates that:

“You can claim for any regular payments you are obliged to pay your employers. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.”

Therefore it seems that contractual commission payments can be claimed based on past sales or work – there can’t be any claims based on future sales etc because the employee will be furloughed and not allowed to perform any work. This new definition appears to also include claims for contractual car allowances on the basis it will be a regular payment paid to an employee.

Benefits in kind cannot be claimed. Benefits provided through salary sacrifice schemes, including pension contributions, should not included in any claim.

No, not necessarily. In most cases employees will need to agree that whilst on furlough leave they will be paid only under the scheme. If they don’t agree technically there could be a breach of contract and an unlawful deduction of wages. As noted above, in reality almost all employees will agree as this will be the least worst option.

If any employees take holiday whilst on furlough they will need their holiday pay paid at full rate of pay/salary.

No, furloughed employees must not do any work. However, they can do volunteer work or training as long as it does not provide services to or generate revenue for or on behalf of the employer’s organisation.

If contractually allowed, a furloughed employee can take up other paid work.

The latest scheme requirements require the employee to sign an agreement agreeing to cease all work for the employer.

From August, employers will be allowed to ask employees to work part-time. An announcement is awaited on the detail of this change.

Yes, whilst on furloughed, holiday entitlement under the Working Time Regulations will continue to accrue as normal. It is assumed that contractual holiday entitlement will also accrue. On Friday 17 April HMRC issued updated guidance that confirmed employees can take holiday whilst furloughed (see holiday question below for more details).

The latest HMRC guidance on Holiday entitlement and pay during coronavirus dated 13 May 2020 is here.

No, they are not covered under the scheme. Only employees who are on the employer’s PAYE on or before 19 March 2020 can be furloughed under the scheme.

Yes, employees can still be dismissed for redundancy while on furlough leave or immediately after it ends. There is no need for the employee to return to work. However, in both cases normal redundancy consultation and dismissal procedures must still be followed. We know that some employees are trying to argue that any redundancy dismissal would be unfair because they could be furloughed. In some cases this argument may have merit but by no means in every case. Employers can still decide if and when they want to reduce headcount. For specific advice on your company’s situation please contact Simon Quantrill or Katherine Sheerin.

The latest HMRC guidance published on 21 May 2020 for employers on the Coronavirus (COVID-19) Job Retention Scheme is from here.

Plus HMRC’s step by step guide for employers (updated on 11 May 2020) on how to claim is here.

The HMRC guidance for employees is here. This will show you how employees can check if their employer can use the CJRS.

If you want to get the full detail of how the CJRS will be operated by HMRC you will need to read the Direction to HMRC from the Chancellor of the Exchequer issued on 15 April 2020 and the further (second) direction here.

In addition the new Government Coronavirus Business Support website includes updated information plus other wider business support information, advice and guidance.

Workers are only entitled to both for the hours they are working. Therefore, furloughed workers, who are not working, must be paid the lower of 80% of their salary, or £2,500, even if, based on their usual working hours, this would be them below the NLW/NMW pay levels.

However, if furloughed workers are required to complete online training courses then they must be paid at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be covered under the scheme.

Yes, we can provide you with a bespoke furlough agreement to make sure you correctly furlough your affected employees. Please contact Simon Quantrill He will be pleased to discuss your requirements. It is a requirement of the scheme that each furloughed employee signs an agreement that includes their agreement to cease all work for the employer and the terms and conditions of the furlough.

This was one of the most frequent questions we were being asked but the latest HMRC guidance published on 17 April 2020 finally confirmed that employees can take holiday whilst furloughed.

The full guidance states:

Holiday Pay

Furloughed employees continue to accrue leave as per their employment contract.
The employer and employee can agree to vary holiday entitlement as part of the furlough agreement, however almost all workers are entitled to 5.6 weeks of statutory paid annual leave each year which they cannot go below.

Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks. Therefore, if a furloughed employee takes holiday, the employer should pay their usual holiday pay in accordance with the Working Time Regulations.

Employers will be obliged to pay additional amounts over the grant, though will have the flexibility to restrict when leave can be taken if there is a business need. This applies for both the furlough period and the recovery period.

If an employee usually works bank holidays then the employer can agree that this is included in the grant payment. If the employee usually takes the bank holiday as leave then the employer would either have to top up their usual holiday pay, or give the employee a day of holiday in lieu.

During this unprecedented time, we are keeping the policy on holiday pay during furlough under review.

So holidays will not stop an employee being furloughed but how many employees will want to take any paid holiday whilst on furlough leave? Probably not all of them if they take the view that sitting at home with no where to go is not a holiday. Many may prefer to just stay on furlough as they are being paid albeit at a reduced rate. Why would the employee want to use accrued holiday entitlement to sit at home with not much more pay? Hardly a holiday for most people. Hardly the health and safety measure intended under the Working Time Regulations. That said some employees may see taking accrued holiday as a means to top up their pay. This is because holiday pay has to be paid at the employee’s full rate of pay.

As an employer why would you want to encourage employees to take holiday whilst furloughed? You may want to minimise the amount of accrued holiday that will be left after furlough leave ends or you too might see taking holiday as a means of topping up pay to 100%. Other employers may want to restrict employees taking holiday to avoid paying holiday pay which may be a cost best avoided at this time and which may not be recoverable from HMRC.

For some employers they may decide it is best for them if they instruct their furloughed employees to take all or some of their accrued holiday whilst furloughed. For other employers they may wish to suspend all holidays during furlough.

If you force furloughed employees to take holiday will this cause upset and harm trust and confidence; or will employees appreciate and understand the reasons for this?

Different employers will adopt different approaches to suit their business or organisation’s requirements.

Whatever you decide about how to treat holidays, you should cover your approach in your furlough agreement letter.

Simon Quantrill will be happy to discuss and advise on your organisation’s approach to holidays for furloughed employees.

On 13 May 2020 new Government guidance on how holiday entitlement and pay operate was published. Read it here.

New emergency rules have come into force that ease the Working Time Regulation restrictions that prevent carry over of the four weeks’ annual leave entitlement from one holiday year to another.

The Working Time (Coronavirus) Amendment Regulations 2020 amend regulation 13 of the Working Time Regulations 1998 to allow the carry-over of any untaken four weeks’ leave where it was not reasonably practicable to take it in the leave year as a result of the effects of the coronavirus (including on the worker, the employer or the wider economy or society).

It is now possible for furloughed and other employees and PAYE workers to carry forward untaken holiday for two years.

As a result of this change, employers may feel less concerned about a bank of accrued holiday building up this year to be used in the current holiday year if and when life returns somewhere near normal.

Employers will need to decide if all holiday entitlement can be carried forward, including contractual entitlement in excess of statutory weeks.

The original guidance has changed. Employers can furlough employees who are being shielded or off on long-term sick leave. Employers have a choice if they wish to do this.

Short term illness or self-isolation should not be a consideration in deciding whether to furlough an employee. However the guidance now states if employers “want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.”

The updated HMRC Statutory Sick Pay manual now states that employees do not qualify for SSP if furloughed.

Yes subject to latest HMRC guidance which states: “Employers can claim for furloughed employees who are shielding in line with public health guidance (or who need to stay at home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.”

It should be noted that this guidance appears narrower than the general statement about when employees can be furloughed.

It is up to the employer to decide whether to move such an employee onto SSP (or contractual sick pay) or keep them on furlough, at their furloughed rate of pay. If the employee is moved onto SSP, you cannot continue to claim for the furloughed pay.

Yes, the latest guidance has clarified how TUPE transfers will be treated. The basic provision is that “A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.”

On 22 May 2020 further guidance on the interplay between furlough and TUPE was included in the second Treasury Direction from clause 9.1.

The normal rules for these type of leave continue to apply.

You can claim through the CJRS for enhanced earnings related contractual pay for maternity pay, adoption pay, paternity pay and shared parental pay.

When the CJRS ends you must make a decision about your staff. Depending on your circumstances you will have to consider which employees can return to their normal duties or do you have to consider making redundancies. However, you must consider alternatives to redundancies such as reducing hours, pay or asking for volunteers. If you have to proceed with redundancies you must follow HR best practice and employees will be entitled to notice and if they have more than two years’ continuous service to a statutory redundancy payment.

Expert, pragmatic and affordable advice

Providing you with help worth having - for you and us it's personal.

Simon Quantrill, Principal Solicitor

Contact me on

01473 688 100

Expert, pragmatic and affordable advice

Providing you with help worth having - for you and us it's personal.

Simon Quantrill, Principal Solicitor

Contact me on

01473 688 100

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