For many of us, the recent weeks have brought some semblance of good news in one form or another: Joe Biden winning the US election, Pfizer, Moderna and now Oxford University/AtraZeneca developing effective coronavirus vaccines, and the extension of the Coronavirus Job Retention Scheme (CJRS). This latter development came as a bit of a surprise, particularly given the focus on the Job Support Scheme (JSS) which was due to replace ‘furlough’, however, perhaps recognising the need for clarity as England went back into a national lockdown, on 5 November 2020 Chancellor Rishi Sunak announced the extension of the CJRS until 31 March 2021 to cover what is expected to be a difficult winter period.
We have been told that the extension reflects new evidence that the economic effects of a lockdown on businesses are longer lasting than the restrictions themselves, and that the March deadline will allow employers time to plan. The hope must be that the increased support which the extended scheme provides will at least postpone redundancies in the short-term; a more positive economic outlook in the New Year combined with the JSS to bridge the gap could even avoid some of these entirely.
Under the extended CJRS, we effectively go back to the version of the scheme which was in place in August 2020 – the government will pay 80% of wages for normal hours not worked, up to £2,500 per month per employee, with employers paying National Insurance contributions and pension contributions in respect of those hours. This will remain the case from 1 November 2020 through to 31 January 2021. The monthly cap of £2,500 is pro-rated for part time staff so if someone usually works 3 out of 5 days a week then the monthly cap on their recoverable furlough pay would be £1,500.
‘Flexible furlough’ continues under the extended CJRS meaning employers will be able to offer furlough on a full-time or part time basis, and this can change from week-to-week (the minimum claim period is 7 consecutive calendar days). One notable difference to the scheme is that neither the employer nor the employee needs to have previously used the CJRS for a claim under the extended CJRS – this will enable employers to furlough employees who were not furloughed the first time around. There is also no longer a maximum number of employees for whom an employer can claim under the scheme.
To be eligible for the extended CJRS, employees must have been on the employer’s PAYE payroll at 23:59 on 30 October 2020. As previously, employers must obtain their employees’ consent to being furloughed and confirm this in writing then keep a written record of the agreement (for at least 5 years) as well as the employee’s worked/furloughed hours (for at least 6 years).
There are tight time limits for submitting furlough claims under the extended CJRS – claims for November must be submitted to HMRC by no later than 14 December 2020 and subsequent claims by no later than day 14 of the following month. The circumstances in which an extension of time may be granted, where there is a ‘reasonable excuse’, are limited.
Under the extended CJRS, employees who were made redundant or stopped working after 23 September 2020 can be re-employed and furloughed, however, there is no obligation for an employer to do this. Similarly, employees who are shielding in line with public health guidance can be furloughed yet, again, this is at the employer’s discretion.
In light of the above developments, both the JSS and the Job Retention Bonus Scheme have been put on hold pending a review in January 2021, when employers may be required to increase their contributions under the extended CJRS during February and March 2021
As the extended CJRS was introduced at short notice and it remains uncertain how restrictions will differ from the present lockdown conditions, including between regions of the country, from 4 December 2020, expect this version of the scheme to evolve every bit as much as it has to date. Indeed, since its inception, one significant change announced via the guidance on 13 November 2020 has seen the prohibition on furlough claims during the period an eligible employee is serving contractual or statutory notice. Keeping abreast of the changes will therefore be vital.
Still, to end as I began on a positive note, there are reasons to be hopeful that things will improve once we see the back of 2020, and the extended CJRS is one of these. In the meantime, if you require any assistance with the extended coronavirus job retention scheme or any other employment matter, please contact myself, Matthew Rowlinson, or my colleagues Paul Clark, or Sally Lomas Fletcher from our Employment Team.
Matthew Rowlinson, Solicitor, Employment Law
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