Coronavirus Job Retention Scheme (CJRS): Support extended to businesses through the winter05 Nov 2020 // Insights
The Chancellor announced Furlough will now run until the end of March 2021. Helen Crossland summarises the key points.
Following the decision to extend the furlough scheme through the current national lockdown, the Government has confirmed it will keep open the scheme until 31 March 2021.
Full guidance is due to be released on 10 November 2020. For now:
- Until January 2021, claims can be made for 80% of an employee’s usual salary for hours not worked, capped at £2,500 per month. For hours not worked by an employee, employers will only be asked to cover their National Insurance and employer pension contributions.
- The percentage of wages that can be claimed during February and March 2021 will be reviewed in January 2021.
- The scheme is available to businesses ordered to close during national or local lockdowns, and those which can remain open but where employees cannot do their jobs or who have insufficient work to sustain their normal working hours. This includes those that are shielding (in line with public health guidance) and those that have caring responsibilities and need to look after their children.
- An employee need not have been furloughed previously to qualify for the extended scheme. They must, however, have been employed and be on their employer’s PAYE payroll as of 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
- Businesses who have not previously called on the CJRS can claim under the extended scheme.
- To be eligible to recover a grant for an employee under the CJRS, the employer must have confirmed to the employee in writing that they have been furloughed or flexibly furloughed. Copies of furlough agreements should be kept for 5 years and records of how many hours their employees’ work and the number of hours furloughed should be kept for 6 years.
- The scheme will continue to operate flexibly. Employers can furlough employees fully, part-time or on a rotation basis. There is no minimum furlough period and flexible furlough agreements can be entered into more than once. Although flexible furlough agreements can last any amount of time, unless otherwise specified, the period claimed must be a minimum period of 7 consecutive calendar days.
- Employers can vary the hours an employee works with their agreement. The employer must pay in full for any hours worked as well as employer National Insurance and employer pension contributions.
- As before, employees can be on any type of employment contract to qualify.
- For employees furloughed previously, their reference pay and hours will be unchanged and will be based on the same furlough calculations as before.
- For employees being furloughed for the first time, for those on a fixed wage their furlough pay will be based on 80% of their wages payable in the last pay period ending on or before 30 October 2020. For those earning variable wages, it will be 80% of the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their furlough period begins. This detail is subject to further guidance due on 10 November 2020.
- Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for under the CJRS.
- An employee who was on a fixed-term contract set to expire after 23 September and who was on the employer’s payroll as of that date, can also be re-employed and claimed for, provided that the other eligibility criteria are met.
- The scheme is not intended for short-term sickness absences, however, employers can furlough employees off sick, should they wish to do so. Furloughed employees who become ill due to coronavirus must be paid at least statutory sick pay or be kept on furlough, at their furlough rate.
- As under the scheme previously, employees must not undertake any work for their employer that makes money or provides services to their employer or any linked or associated employer. Employees can however take part in training, volunteer for another employer or organisation and work for another employer if contractually allowed to do so.
- Employers can top up employees’ wages above the maximum salary threshold at their own expense if they wish to.
- Employers will be able to claim from 8am on 11 November 2020 and grant payments are expected to be paid within 6 working days.
- Both the Job Support Scheme (due to replace the CJRS on 1 November 2020) and the Job Retention Bonus have been postponed until further notice.
Should you have any queries on the above or require any employment related advice, please contact Helen Crossland at email@example.com or on 020 7725 8034 or Fiona Mendel at firstname.lastname@example.org or on 020 7725 8033
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