Furlough scheme extended – what we know so far
6 November 2020
As we covered in our article here, Boris Johnson announced on 31 October 2020 that England would be going into a second lockdown from 5 November until 2 December 2020, and that because of that, the Coronavirus Job Retention Scheme (CJRS) (otherwise known as the furlough scheme) would be extended to cover the lockdown period. The Job Support Scheme which had been due to take effect from 1 November 2020, has been postponed.
- During the extension to the furlough scheme the terms will be the same as they were in August 2020, i.e. employers can claim 80% of each furloughed employee’s salary up to £2,500, with employers only responsible for paying employer’s NI contributions and auto-enrolment pension contributions.
- To be eligible to be furloughed this time around, the employee must have been on the employer’s payroll as at 30 October 2020.
- Unlike the previous version of the scheme, the information we’ve seen so far indicates that there is no requirement for the employee to have been furloughed previously in order to qualify.
- It is potentially possible for employees who were on the employer’s payroll as at 23 September 2020 to be re-employed in order to qualify for the scheme. As was the case with the original version of the CJRS, there is no legal obligation for an employer to do this, and there are complications involved in doing so. If you receive a request from an ex-employee about this, we suggest that you take advice.
- As before, a written agreement with an employee will be required in order to furlough them. However, given the last minute nature of the Government’s announcement, it is possible to backdate furlough agreements to 1 November 2020 provided that an agreement is reached with the employee by 13 November 2020 (and provided that the employee was actually furloughed during that time).
- Flexible furlough is allowed, as it was in the previous version of the scheme, so it is possible for employees to do some work (the furlough claim is then based on their unworked hours).
- There is a slightly different calculation involved for people who were previously furloughed under the original scheme, as compared to people who are only eligible for the new scheme. Details of this are available here.
- The extended scheme gives a shorter time in which to make a claim as compared with the previous version of the CJRS. It will be important for employers to be aware of the deadlines – further information about this is available here.
- The Chancellor announced in the House of Commons yesterday that the scheme will be open until the end of March 2021. Until January the contributions will remain as explained above, but a review will take place in January to see whether employers may be expected to contribute more, depending on the situation with the pandemic at that time.
- As before, it is possible (but not obligatory) to furlough employees who are ‘shielding’ under the latest Government guidance.
- Employees will continue to accrue holiday while they are furloughed, as was the case before. Employers may wish to consider requiring employees to use some of their holiday whilst on furlough to prevent it building up. The employee should be paid their normal pay during any periods of holiday so the employer will need to pay a ‘top up’ in addition to their furlough pay.
- It is still possible for employees to be made redundant whilst on furlough (which would not have been the case under the Job Support Scheme).
- The Job Retention Bonus, which was due to pay out to employers in relation to employees who they had previously furloughed but were still employed at the end of January, has been ‘put on hold’ for the time being.
Further guidance is due to be published in the coming days. We will of course update you on any significant developments.
If you are an employer with an employment law query, then we can help. Please call us on 01243 836840 for a no obligation chat, or email us at [email protected].