[UK] Government extends furlough scheme to March 2021

Following on from the Chancellor’s announcement this week on the extension to the Coronavirus Job Retention Scheme (CJRS) the government has now published a policy paper providing further information. Emma Bartlett - Partner at Charles Russell Speechlys LLP - provides a detailed summary of the paper’s contents. 

Whilst full guidance is expected to provide more detail on November 10, what we know now is: 

Overview 

• The extended scheme is to support individuals and businesses who are “impacted by disruption” caused by COVID-19. 
• It will remain open until March 31, 2021. 

• For claim periods running to January 2021 employees will receive 80 per cent of their usual salary for hours not worked, up to a maximum of £2,500 per month (the cap is proportional to the hours not worked). 
• The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more. 
• Employees who were on the payroll on September 23, 2020, but who left after that, can be re-employed and claimed for. 
• The job retention bonus will not now be paid in February, but a “retention incentive” will be deployed at the appropriate time. 

Employers who can claim  

• Employers do not need to have used the CJRS previously. 
• Employers across the UK can claim, whether they are open or closed. 
• More details on eligibility will be provided in the full guidance on November 10.  

Eligible employees  

• Employers can claim for employees on their PAYE payroll on October 30, 2020. A PAYE Real Time Information submission must have been made for that employee between March 20, 2020, and October 30, 2020. 

• Furlough can be flexible, on a full or part-time basis. 
• For employees previously claimed for under the CJRS, the same calculation for reference pay and usual hours should be used. 
• For employees not previously furloughed, there are alternative calculations of reference pay and usual hours to be used (see below). 
• Employers will need to pay National Insurance Contributions and employer pension contributions on grant monies, as well as any hours worked as normal. 
• As before, during furlough hours, the employee cannot do any work for their employer (but can take part in training, volunteer for another organisation or work elsewhere if the contract allows).  

Employees whose health has been affected  

• Employees can be furloughed where they are unable to work because 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. 
• The CJRS is not intended for short term sickness absence, but employers can, for business reasons, furlough employees that are currently off sick. 

Employee agreement 

• There is no minimum furlough period.  

• Employees can be fully furloughed, or flexibly furloughed.  
• Flexible furlough agreements can last any amount of time and flexible furlough agreements can be entered into more than once. 
• Although flexible furlough agreements can last any amount of time, the period claimed for must be for a minimum claim period of 7 consecutive calendar days. 
• Usual employment and equality rights will apply in making decisions to furlough. Employers must make any changes with the agreement of employees and confirm in writing that they have been furloughed or flexibly furloughed. The employee does not have to provide a written response. 
• Employers must keep a written record of the agreement for 5 years and keep a record of the hours worked, and furloughed, for 6 years. 

• Any flexible furlough or furlough agreement made retrospectively that has effect from November 1, 2020, will be valid (if it meets the conditions above) provided it is put in place by November 13, 2020. 

Calculations  

• For those on the earlier CJRS, the same calculations apply. 
• For those not previously eligible, 80 per cent of wages is calculated: 

• On a fixed salary – 80 per cent of wages payable in the last period before October 30, 2020. 

• Usual hours are calculated: 
• Fixed hours – the contracted hours in the last pay period ending October 30, 2020. 
• Variable hours – an average of hours worked between the start date (or April 6, 2020, whichever is later), and the day before the CJRS extension furlough period begins. 

• Employers must report and claim for a minimum period of 7 consecutive calendar days. 
• Employers must report actual hours worked, and the usual hours an employee would have worked in the claim period. 
• The claim period must start and end in the same calendar month and cannot overlap. 
• The claim can be made in anticipation of a payroll run, at the point of payroll or after payroll has been run. 

• There will be no gap in eligibility between the original end date of October 31, 2020, and the extension starting on November 1, 2020. 

Employers will be able to submit claims from November 11, 2020. 

• Claims relating to November 2020 must be made by December 14, 2020, with subsequent claims being made by day 14 of the following month. 
• The closing date for claims up to October 31, 2020, remains November 30, 2020. 
• We anticipate more details on eligibility and how to claim on November 10 and will update this guidance accordingly. 

Source: Emma Bartlett

Charles Russell Speechlys LLP

Following on from the Chancellor’s announcement this week on the extension to the Coronavirus Job Retention Scheme (CJRS) the government has now published a policy paper providing further information. Emma Bartlett - Partner at Charles Russell Speechlys LLP - provides a detailed summary of the paper’s contents. 

Whilst full guidance is expected to provide more detail on November 10, what we know now is: 

Overview 

• The extended scheme is to support individuals and businesses who are “impacted by disruption” caused by COVID-19. 
• It will remain open until March 31, 2021. 

• For claim periods running to January 2021 employees will receive 80 per cent of their usual salary for hours not worked, up to a maximum of £2,500 per month (the cap is proportional to the hours not worked). 
• The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more. 
• Employees who were on the payroll on September 23, 2020, but who left after that, can be re-employed and claimed for. 
• The job retention bonus will not now be paid in February, but a “retention incentive” will be deployed at the appropriate time. 

Employers who can claim  

• Employers do not need to have used the CJRS previously. 
• Employers across the UK can claim, whether they are open or closed. 
• More details on eligibility will be provided in the full guidance on November 10.  

Eligible employees  

• Employers can claim for employees on their PAYE payroll on October 30, 2020. A PAYE Real Time Information submission must have been made for that employee between March 20, 2020, and October 30, 2020. 

• Furlough can be flexible, on a full or part-time basis. 
• For employees previously claimed for under the CJRS, the same calculation for reference pay and usual hours should be used. 
• For employees not previously furloughed, there are alternative calculations of reference pay and usual hours to be used (see below). 
• Employers will need to pay National Insurance Contributions and employer pension contributions on grant monies, as well as any hours worked as normal. 
• As before, during furlough hours, the employee cannot do any work for their employer (but can take part in training, volunteer for another organisation or work elsewhere if the contract allows).  

Employees whose health has been affected  

• Employees can be furloughed where they are unable to work because 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. 
• The CJRS is not intended for short term sickness absence, but employers can, for business reasons, furlough employees that are currently off sick. 

Employee agreement 

• There is no minimum furlough period.  

• Employees can be fully furloughed, or flexibly furloughed.  
• Flexible furlough agreements can last any amount of time and flexible furlough agreements can be entered into more than once. 
• Although flexible furlough agreements can last any amount of time, the period claimed for must be for a minimum claim period of 7 consecutive calendar days. 
• Usual employment and equality rights will apply in making decisions to furlough. Employers must make any changes with the agreement of employees and confirm in writing that they have been furloughed or flexibly furloughed. The employee does not have to provide a written response. 
• Employers must keep a written record of the agreement for 5 years and keep a record of the hours worked, and furloughed, for 6 years. 

• Any flexible furlough or furlough agreement made retrospectively that has effect from November 1, 2020, will be valid (if it meets the conditions above) provided it is put in place by November 13, 2020. 

Calculations  

• For those on the earlier CJRS, the same calculations apply. 
• For those not previously eligible, 80 per cent of wages is calculated: 

• On a fixed salary – 80 per cent of wages payable in the last period before October 30, 2020. 

• Usual hours are calculated: 
• Fixed hours – the contracted hours in the last pay period ending October 30, 2020. 
• Variable hours – an average of hours worked between the start date (or April 6, 2020, whichever is later), and the day before the CJRS extension furlough period begins. 

• Employers must report and claim for a minimum period of 7 consecutive calendar days. 
• Employers must report actual hours worked, and the usual hours an employee would have worked in the claim period. 
• The claim period must start and end in the same calendar month and cannot overlap. 
• The claim can be made in anticipation of a payroll run, at the point of payroll or after payroll has been run. 

• There will be no gap in eligibility between the original end date of October 31, 2020, and the extension starting on November 1, 2020. 

Employers will be able to submit claims from November 11, 2020. 

• Claims relating to November 2020 must be made by December 14, 2020, with subsequent claims being made by day 14 of the following month. 
• The closing date for claims up to October 31, 2020, remains November 30, 2020. 
• We anticipate more details on eligibility and how to claim on November 10 and will update this guidance accordingly. 

Source: Emma Bartlett

Charles Russell Speechlys LLP