The governments of Ireland, Guernsey and Jersey have created payroll co-funding/subsidy schemes in response to the COVID-19 crisis. The rules and eligibility criteria are different in each jurisdiction, as are the statutory provisions with regard to variations of terms, redundancy and collective consultation.

This document – created by the employment law specialists in Walkers' Dublin, Guernsey and Jersey offices – is designed to assist businesses with employees in one or more of the jurisdictions, and their advisers, understand the nuances and distinctions that exist across the respective laws.

1) What are the key provisions of the payroll co-funding scheme / wage subsidy in your jurisdiction?

Ireland

Employers may apply for a subsidy from Irish Revenue through the Temporary Wage Subsidy Scheme.

There are two phases.

Phase one operated from 26 March to 4 May 2020 and was limited to 70% of an employee's net weekly sum up to a maximum sum of €410 (whichever is the lesser) for each qualifying employee.

Phase two operates from 4 May 2020. The key provisions are as follows:

  • Level of subsidy available based on the previous weekly average take home pay for each employee.
  • The previous weekly average take home pay is based on an employee's pay in January and February 2020.
  • A subsidy of 85% of wages is available for employees whose previous average weekly pay was from €0 to €412;
  • a subsidy of €350 is available for employees whose previous average weekly pay was from €412 to €500; and
  • a subsidy of €350 or 70% of wages (whichever is the lesser) is available for employees whose previous average weekly pay was €500 to €586.
  • Previous average take home pay between €586 and €960 per week will be subject to 'tapering' so the level of subsidy is calculated by reference to the amount of any additional ('top up') payments made by the employer and its effect on the weekly average take home pay.

Income tax, USC, employee PRSI and employer PRSI will not apply to the subsidy payment. Employee PRSI will not apply to any top up paid by the employer and a reduced rate of employer PRSI will be applied to any top up paid by the employer.

This scheme is currently expected to operate until 18 June 2020.

Guernsey

Employers may apply for payments from the States under the Co-Funded Payroll Scheme.

The key provisions are as follows:

  • 80% of salary based on statutory minimum wage (£238 for standard 35 hour week)
  • States' contribution is subject to the employer contributing a minimum of 20% to reach full statutory minimum wage
  • Limited to specific sectors, but no restriction on the size of the business
  • Now extended to self-employed (whether operating through a company or as a sole trader)

This scheme is currently expected to operate until end of June 2020.

Jersey

Employers may apply for payments from the States under the Co-Funded Payroll Scheme.

There are two phases.

Phase one was limited to hospitality and retail and was in operation up to 31 March 2020.

Phase 2, applies from 1 April 2020 to 30 June 2020 (unless it is extended). The key provisions are as follows:

  • 80% of salary up to maximum salary of £2,000 a month
  • Contribution from States of Jersey capped at £1,600
  • States' contribution is subject to the employer contributing a minimum of 20%
  • Employers can try to negotiate a reduced salary for employees earning over £2,000 a month
  • Not available for employee with gross salary of £4,558 a month
  • Includes self-employed, and zero-hours workers

If a business is unable to pay their 20% contribution towards their employees' salaries, they can apply to the government for an exemption from the need to pay any contribution. They will need to be able to show that they have little to no income during the relevant period, and little to no working capital. They will also need to show that they are not eligible for assistance under the schemes discussed in Question 10 below.

This scheme is currently expected to operate until end of June 2020.

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Originally published May 7, 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.