Coronavirus Job Retention (Furlough) Scheme extension

The Coronavirus Job Retention (Furlough) Scheme (CJRS) was due to come to an end on 31 October 2020, to be superseded by the Job Support Scheme (“JSS”) on 1 November.

When the Prime Minister announced on 30 October that there would be a national lockdown in England from 5 November to 2 December, he also advised that the CJRS would be extended until December 2020 and that the JSS would be postponed, to be introduced following the end of the furlough scheme. The extended CJRS will operate as the original scheme did.

Details of the CJRS Extension were further amended on 5 November 2020 when it was confirmed that the scheme would now be in place until 31 March 2021, and that the JSS would remain closed and would not be activated for the foreseeable future.

CLICK HERE to find out more about the Coronavirus Job Retention (Furlough) Scheme.

Both the CJRS extension and the JSS are applicable to all four nations of the United Kingdom.

Support available under the original CJRS had been scaled down from 80% of an employee’s normal pay for unworked hours, last available in August 2020, to 60% in October 2020. The extended CJRS which runs until March 2021 is more generous to employers than either the most recent level of support under the CJRS or the now-mothballed JSS, in that it mirrors the levels available under the original CJRS in August.

Specifically, the Government will pay up to 80% of an employee’s normal pay up to a cap of £2,500 per month, and employers will be responsible only for the National Insurance and pension contributions. As in the original scheme, employers can still choose to top up employee wages to 100% at their own expense. Flexible furloughing will be permitted in addition to full time furloughing, and for worked hours employees will be paid by their employer in the normal way.

Importantly, neither the employer nor the employee needs to have previously used the CJRS, so it is open to new applications in respect of the salaries of newly furloughed staff from November onwards. To be eligible, employees just need to have been on the employer’s PAYE payroll by midnight on 30 October 2020, with an appropriate Real Time Information submission having been made to HMRC for that employee by that date.

When claiming the CJRS grant for furloughed hours under the extended scheme, employers will need to report and claim for a minimum period of 7 consecutive calendar days, detailing the hours worked and the hours an employee would be expected to work in a claim period.

The Government has yet to confirm when and how claims can be made in respect of the extended support, but there will be no gap in eligibility for that support between the original end date of 31 October and the CJRS extension.

Given the late notice of the extension to the CJRS and postponement of the JSS, many employers will need to take some immediate decisions and actions in relation to their staff. This is likely to be particularly relevant where workforce changes had been planned to coincide with the original 31 October end date for the CJRS and the 1 November start date for the JSS. Such plans will need to be revised and, in most cases, urgent communication will be required with employees.

For example:-

Employers with staff still on furlough or flexible furlough may want to extend the arrangements, and it would be sensible to ask these employees to sign and return letters (or as a minimum confirm by email) agreeing to this extension beyond 31 October;
Employers who have already put in place JSS temporary working arrangements to be effective from 1 November should communicate with their employees about the extension to the CJRS and the postponement of the JSS, and, if appropriate, ask them to agree to be furloughed instead; and
Where employees have not been furloughed and are not signed up to JSS temporary working arrangements, and the employer is now considering furloughing, it will be important to enter into a more detailed furlough agreement.

PGA Members who are employers may want to consider how best to take advantage of this Government support to align with their business needs up to 31 March 2021.