Covid-19, Employment Law

Furlough Scheme Extended

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Furlough Scheme Extended

As a result of increasing infection rates across the Country, and therefore measures imposed upon businesses to help slow the spread of COVID-19, the Government has announced an extension to the Coronavirus Job Retention Scheme (“CJRS”) – also known as the Furlough Scheme.
As you will remember, this scheme officially ended on 31st October 2020. However, it has now been extended until December and its replacement, the Job Support Scheme, has been postponed and will not now be introduced until the end of this extended period of Furlough.
Up until December, employees will now be entitled to receive 80% of their current salary for hours not worked, up to a maximum of £2,500. This means in fact that the extended furlough scheme is more generous for employers than it was in October.
Here are the further details we know so far at the time of writing (1.30pm on Sunday 1st November):

  • Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time and will only be asked to cover National Insurance and employer pension contributions.
  • As stated above, the Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.
  • This extended Job Retention Scheme will operate as the previous scheme did, with businesses being paid upfront to cover wages costs.
  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
  • The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
  • To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020.
  • As under the current CJRS rules, employees can be on any type of contract and employers will be able to agree any working arrangements with employees.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period.
  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days, and will need to report hours worked, and the usual hours an employee would be expected to work, in a claim period.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
  • For hours not worked by the employee, as above, the government will pay 80% of wages up to a cap of £2,500. The grant must be paid to the employee in full.
  • Employers will pay employer NICs and pension contributions and should continue to pay the employee for hours worked in the normal way.
  • As with the current CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
  • The Government will confirm shortly when claims can first be made in respect of employee wage costs during November, but there will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension.

As always, the Howarths Advisory team will keep abreast of any further changes and announcements and will communicate these as soon as possible to put your business in the most informed position possible. If because of this latest announcement you require advice specific to your individual circumstances, then please do not hesitate to contact your Howarths Advisor who will be more than happy to help. We are with you all the way.
If you or a member of your team would like to make sure you are ready for the introduction of the Job Support Scheme once this extended period of Furlough ends, then please register your interest in our JSS Webinar which is now running on Wednesday 18th November. Hosted by two of our most Senior Employment Law Solicitors, Charlotte Geesin and Sarah Edwards, and running both in the morning at 10:00am, or afternoon at 2:30pm, this is one you cannot afford to miss to make sure your business is fully equipped to deal with these choppy waters. To register your interest, click your preferred time and enter your details.

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