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CJRS (Furlough) Scheme Extended to March 2021

CJRS (Furlough) Scheme Extended to March 2021

Following the government’s announcement at the weekend that they would be extending the Coronavirus Job Retention Scheme (CJRS) until the beginning of December; the Chancellor Rishi Sunak has today announced the scheme will in fact remain open until the 31st March 2021.

For the 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, hence the scheme is more generous than the scheme running in September and October. Employers will only be asked to cover National Insurance and employer pension contributions.

The government will review the scheme in January to decide whether economic circumstances are improving enough to ask employers to contribute more. The Job Support Scheme which was due to start on the 1st November and the Job Retention Bonus (which would have been paid in February 2021) has been put on hold (for now).

There is an inference that not all employers will be able to utilise the extended CJRS, as the government has said “the HMRC will publish details of employers who can make claims under the extended CRJS scheme, starting from December”. We understand that  full details will be published on 10th November 2020.

The scheme rules will remain largely the same as before, but with a number of changes:-

  • Employers can claim for any employees who were employed and on their PAYE payroll on 30th October 2020 (they do not need to have previously been furloughed). The employer must have made a PAYE Real Time Information (RTI) submission to the HMRC between the 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.
  • 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.
  • Employees who have previously been furloughed continue to have their reference pay and hours based on the existing furlough calculations (as under the old scheme). Employees who have not previously been furloughed will have a different pay/hour’s reference period. Full guidance will be provided on 10th November, but broadly the pay is based on 80% of the wages payable in the last pay period ending on or before 30 October 2020 (for those on fixed wages), or 80% of the average payable between the start date of their employment or 6th April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins (for those on variable wages).
  • Employees can be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or if they have caring responsibilities resulting from coronavirus, including employees that need to look after children
  • As under the CJRS previously, during hours which employees are recorded as being on furlough, they cannot do any work for their employer or any organisation linked or associated with their employer.
  • Employees that were employed and on the payroll on 23rd September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for.
  • There is no minimum furlough period. Flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
  • Although flexible furlough agreements can last any amount of time, unless otherwise specified the period claimed for must be for a minimum claim period of 7 consecutive calendar days.
  • To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed.
  • The closing date for claims up to and including 31st October remains 30th November 2020, using existing CJRS guidance.

As mentioned above, the government will be publishing full details on the 10th November 2020 and we will update our FAQs at that time.

Fiona Haworth. You can contact Fiona on fiona@practicalhr.co.uk

If you feel that you need guidance or advice on this matter, please call Practical HR on 01702 216573 or email Fiona on the above.

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