pension scheme as part of the overall employer contribution, and there is no obligation on the member of staff to contribute.
The amount the individual has agreed to sacrifice for pension may appear on payroll as an employee pension contribution, but it is imperative to remember that the obligation in the pension scheme rules is for the employer to pay the total contribution and under the pension scheme rules there is no requirement on the individual to pay a pension contribution. CJRS guidance maintains that when calculating 80% of a furloughed worker’s pay, the reference salary to use is the amount after the salary has been sacrificed. All of the grant received must be paid to employees in some form of money, and the pay during the furlough period should be treated as the post-sacrifice pay so no further sacrifice is made on that amount.
There is a clear distinction between what employers can reclaim through the grant and what can be paid in relation to the employee. Any contractual obligations that have been entered into must continue to apply as normal.
If, as a result of contractual arrangement, pay cannot be reduced, employers will need to continue to pay their furloughed workers full pay and calculate pension contributions and the salary sacrifice element as usual on this pay. In these scenarios, a grant can only be claimed under the CJRS to cover the lower of 80% furloughed workers pay or £2,500 per month and the employer’s pension contribution up to the level of the Automatic Enrolment (AE) statutory minimum employer contribution. The guidance provides five illustrative examples, which discuss a variety of scenarios and are each very technical in nature. It would be advisable to familiarise yourself with the guidance if you operate a salary sacrifice scheme and have placed employees on furlough. TPR also reiterates previous guidance that COVID-19 is classed as a life event, meaning that the terms of a salary sacrifice arrangement could be changed, as long as the relevant employment contract is update accordingly with agreement, as a result of coronavirus. However, any changes made to salary sacrifice arrangement from 19 March 2020 will not affect the calculation of the reference wage for the purposes of CJRS, as the calculation is based on the furloughed worker’s last pay period prior to 19 March 2020.
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CIPP Quick Poll: Coronavirus Job Retention Scheme online service 22 April 2020
Following the launch of the online portal for employers to make claims relating to the Coronavirus Job Retention Scheme on 20 April 2020, the CIPP has launched a Quick Poll to assess the usability of the service.
The Quick Poll will take less than a minute to answer, and will give the CIPP an insight into how complex or simple the scheme is to access and use.
Respond to the CIPP’s Quick Poll and give your opinion on whether you found submitting a claim through the Coronavirus Job Retention Scheme easy to do, or not.
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The effect of COVID-19 lockdown on job vacancy levels 22 April 2020
The Institute for Employment Studies (IES) has published a briefing paper which investigates how vacancy levels have altered across different local areas and various job types.
Analysis sourced from the UK job search engine Adzuna highlights the fact that job vacancies have fallen by 42% since the coronavirus lockdown commenced in March 2020. This is the largest monthly fall in at least twenty years.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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