News

Newly appointed staff members will not benefit from the Coronavirus Job Retention Scheme
03 April 2020

Thousands of employees who have started a new job after the 28 February 2020 will not be able to benefit from the Coronavirus Job Retention Scheme (CJRS) and may need to be laid off or sacked to help businesses cut costs.

To be eligible for the scheme, which covers 80 per cent of a furlough workers employment costs up to £2,500 per month, an employee must have been on their company’s payroll on 28 February.

The loophole in the Government’s much-lauded measure means that newly appointed staff members will not have their wage covered and will instead have to rely on their employer paying them.

As many companies are looking at ways to reduce their costs during this challenging period fears are growing that many will have no other option but to lay new employees off or terminate their employment, as long as they are allowed to do so under existing employment law.

Treasury guidance states that employers can re-hire staff that have already been made redundant and still claim the subsidy.

However, it is understood that the CJRS doesn’t apply if the worker has voluntarily left their post already.

A Treasury spokesperson said that those who are not eligible for the scheme “will be able to access a range of other support – including an increase in the Universal Credit allowance, income tax deferrals, £1bn more support for renters and access to three-month mortgage holidays”.