Employment Law Update - Furlough Scheme Extended

With England set to enter into a second lockdown on 5 November 2020, the Government have decided to extend the Coronavirus Job Retention Scheme (CJRS), more commonly known as the Furlough Scheme, until at least 2 December 2020.

03 November 2020

Back to all news + events

With the announcement on 31st October that England is to enter into a second lockdown on 5 November 2020, the Government have decided to extend the Coronavirus Job Retention Scheme (CJRS), more commonly known as the Furlough Scheme, until at least 2 December 2020.

What does this mean?

The CJRS was due to end on 31st October and the Government’s new Job Support Scheme replacing it on 1 November 2020. This has now been put on hold until the CJRS is officially brought to an end. 

Therefore, the furlough scheme will continue as it had been but with a few additional changes.

Eligibility

The scheme has been closed to new applicants since July and employees had to have been on the payroll since March. However, this extension and the changes that come with it now puts many more employees in line for the Government support.

Neither the employer nor the employee needs to have previously used the CJRS to be eligible. The scheme is available in respect of all employees who were on the employer’s PAYE payroll by 23:59 on 30 October 2020.

Claiming the CJRS

Employers can claim the CJRS for the hours that their employees are not working. This will be calculated by reference to their usual hours worked in a claim period. When claiming, employers need to do so for a minimum period of seven consecutive calendar days.

The CJRS can continue to be used on a flexible or a full-time basis.

For the hours not worked, the Government will pay 80% of wages up to a cap of £2,500 which must be paid to the employee in full. This is more than the 60% they were paying throughout October.

Employer’s will continue to pay employer National Insurance and pension contributions, and should continue to pay the employee for hours worked in the normal way.

As before, employers can choose to top up employee wages above the scheme grant if they wish to do so.

The Government have confirmed that flexible furlough will continue to be allowed as well as full-time furlough.

What do you need to do?

The Government are yet to confirm when claims can first be made for wages paid during November but they have made clear that “there will be no gap in eligibility for support between the previously announced end-date of the CJRS and this extension.”

Other parts of the UK have been living with much stricter measures over the past few weeks with no additional support from the UK Government. They have now made calls on the Treasury to provide clarity on whether this extension to the CJRS will only be for as long as England are in lockdown or will this be available, at the 80% rate, to them if they require to lockdown at a later date. Boris Johnson has confirmed that the CJRS will be available to a devolved nation if a lockdown is required at a later date however we are awaiting confirmation from the Treasury that this is the case and importantly that it would be at the rate of 80%.  

If you would like any advice on the CJRS or planning for the Job Support Scheme, please contact our Employment Team who would be happy to assist.

Comment

Partner, Head of Employment

Robert Holland