05 November 2020
Extension of the furlough scheme until 31 March 2021
The Government has announced that it is further extending the Coronavirus Job Retention Scheme until 31 March 2021, as a turbulent COVID-19 affected winter is expected.
Detailed guidance on the scheme is awaited but we do know the following headline details:
- It will operate similarly to under the previous iterations.
- It will remain open until 31 March 2021, across the UK. However, the Government will review the position at the end of January 2021 and may decide to contribute less if the economic circumstances are improving.
- For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked. Employers will only need to cover the employers’ National Insurance contributions and pension contributions.
- Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee.
- The eligibility requirements will be similar to those under the previous iterations, but employers do not need to have used the scheme previously to qualify. Similarly, employees do not need to have been furloughed previously.
- Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020, provided that the employer must have made an RTI submission to HMRC between 20 March 2020 and 30 October 2020 in respect of those employees.
- Employees who were employed (including on a fixed term contract) and on the payroll on 23 September 2020, but who were made redundant or stopped working for their employer afterwards, can be re-employed and claimed for, provided that the employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020 in respect of those employees.
There is also further support for the self-employed, as the next self-employed income support grant, covering the period 1 November 2020 to 31 January 2021, will increase to 80% of three months’ average monthly trading profits, up to a maximum of £7,500 in total.
In terms of the scheme’s interaction with the other pandemic related job schemes, both the launch of the Job Support Scheme and payment of the Job Retention Bonus have been postponed.
Comments from Ben Lindsay in our employment team
“The Government’s timing is again being questioned and this announcement comes on the day that thousands of further job losses have been announced. However, for many this news will be welcomed and hopefully it will provide some security and hope to businesses into the new year.
No doubt some employers will receive requests from former employees to be re-employed under the scheme or may have in mind to try and reverse a recently made redundancy dismissal. However, only employees who were employed on 23 September 2020 can benefit from this possibility. Also, employers have historically had a relatively free choice as to whether to re-employ and many refused to do so, fearing complications when the CJRS comes to an end. As such, it remains unclear how far this option will be taken up and employers should take legal advice before agreeing to re-employ an employee.”