Extension of the Coronavirus Job Retention Scheme
Information correct as at 16 November 2020
On 5 November 2020 the government announced the extension of the Coronavirus Job Retention Scheme (CJRS) until 31 March 2021. Further guidance has been issued in the form of a series of guides and a Treasury Direction.
The key changes are:
- Employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. The government will review this contribution in January 2021. Both full and flexible furlough are permitted under the scheme. Employers will be responsible for National Insurance contributions, pension contributions and annual leave will continue to accrue (payable at full salary rate for the statutory amount of annual leave).
- The scheme can be used for those employees who are unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance. It can also be used for those employees who are unable to work because they have caring responsibilities resulting from coronavirus, including employees that need to look after children.
- An employee who was made redundant (or stopped working) and was re-engaged will be able to be re-employed and access the extended CJRS provided that they were on the payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.
- Claims may not be made for any day that an employee is serving notice between 1 December 2020 and 31 January 2021. This applies to both statutory and contractual notice periods.
- If employers make an employee redundant whilst claiming under the scheme, they should base statutory redundancy and statutory notice pay on the employee’s normal wage rather than the reduced furlough wage.
- There is no maximum number of employees that employers can claim for (under the existing furlough scheme, employers could only claim for the number of employees they had claimed for previous to June).
- To be eligible for the grant, employers must have confirmed to their employee in writing that they have been furloughed and keep a written record for five years.
- Claims can be made in advance and also in respect of furloughed employees’ wage costs from 1 November, with retrospective furlough agreements valid provided that these were put in place up to and including 13 November 2020.
- From December 2020, HMRC will publish employer names who have made claims under the scheme for the month of December onwards.
For further information, please contact our employment team on 01423 566 666
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.