Following the government’s announcement that a new form of lock-down was to commence on 5 November 2020, the Chancellor, Rishi Sunak, announced that the Coronavirus Job Retention Scheme (“CJRS”) scheme would be extended and remain open until 31 March 2021.
The updated guidance setting out how the CJRS will operate until 31 January 2021 was published on 10 November 2020 and confirms to employers that:
“If you cannot maintain your workforce because your operations have been adversely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough”
On 13 November 2020, HM Treasury published its fourth Treasury Direction in relation to the administration of the furlough scheme by HMRC. The four Treasury Directions set out the legal framework under which the CJRS is to be administered.
The government intends to review the scheme rules in January 2021 (when it is expected that further guidance will be published to govern how the CJRS will operate from 1 February 2021 to 31 March 2021).
From 1 November 2020 until 31 January 2021, employers can claim 80% of an eligible employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. To be eligible, an employee must have been employed on 30 October 2020 (and a PAYE RTI submission must have been made to HMRC during the period 20 March 2020 – 30 October 2020, notifying a payment of earnings for that employee).
HMRC will publish employer names, an indication of the value of the claim and, for companies and Limited Liability Partnerships (LLPs) the company registration number of those who have made claims under the scheme for the month of December onwards. Further detail on how HMRC will give an indication of the value of the claim will be available from late November.
The Job Support Scheme (Open) and Job Support Scheme (Closed) that were due to be introduced on 1 November 2020 are on hold. In addition, the Job Retention Bonus Scheme in which a £1,000 grant was to be payable to employers for each employee who had previously been furloughed but who remained in meaningful employment on 1 February 2021, is to be withdrawn.
Employers are able to re-employ employees who were made redundant or stopped working on or after 23 September 2020 and put them on furlough. This applies as long as the employee was employed and on an employer’s PAYE payroll on or before 23 September 2020 (this means that an RTI submission notifying payment in respect of the employee must have been made between 20 March and 30 October 2020).
Employers cannot claim a furlough grant for any notice periods (contractual or statutory) running between 1 December 2020 and 31 January 2021.
The updated guidance which comprises of several documents should be read in full for the detail but the following points should be noted:
– Employees do not need to have been previously furloughed to be eligible. (For claims made ending on 31 October 2020, employers were only able to claim for employees who they had previously furloughed before 1 July 2020 (and submitted a claim before 31 July 2020);
– There is no maximum number of employees which an employer can choose to furlough under the Extended Furlough Scheme. (For claims made ending on 31 October 2020, employers were only able to claim for the same number of employees who they had previously furloughed before 1 July 2020 (and submitted a claim before 31 July 2020);
– Employers can continue to claim for a furloughed employee who is serving a statutory notice period but only up to 30 November 2020 (see above);
– If an employee is unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus (and are following public health guidance which, in particular, strongly advises the individual to work from home), they can be furloughed;
– If an employee is unable to work because they have caring responsibilities resulting from coronavirus (COVID-19), including employees that need to look after children, they can be furloughed;
– For employees on short-term sick leave or self-isolating as a result of coronavirus, they may be entitled to SSP (subject to usual eligibility requirements). SSP payments can be claimed back via the SSP rebate scheme (for up to two weeks of SSP per employee);
– Employees who are currently absent from work on long-term sick leave may be furloughed for business reasons;
– Employers can claim regardless of whether their businesses are open or closed (pursuant to the new lock-down regulations);
– For employees ending maternity leave early to enable them to be furloughed, they will need to provide at least 8 weeks’ notice and furlough is not available until the end of the 8 weeks;
– Employees cannot work for their employer if furloughed, but they can take part in training and/or volunteer for another employer or organisation or work for another employer (if their contract allows);
– There is no minimum furlough period but the period claimed for must be a minimum of 7 days;
– Flexible furlough (i.e. reduced or flexible hours) is acceptable but an employer will need to agree this with the employee and a written record of that agreement must be kept (an employer must keep a record of hours worked and hours furloughed);
– Annual leave continues to accrue during furlough. Any holiday taken during furlough must be topped up to 100% of normal pay by employers;
– To be eligible for the grant, employers must have confirmed in writing to their employee that they have been furloughed and this agreement (which must be kept for five years) must be in place before the start of the claim period (subject to the next bullet point);
– Retrospective furlough/flexible furlough agreements that are effective from 1 November 2020 will be valid but only retrospective agreements put in place up to and including 13 November 2020 may be relied on for the purposes of a claim;
– Employers will need to pay up-front and then claim the wages back under the scheme (open from 11 November 2020);
– Employers will need only to contribute to employer National Insurance and employer pension contributions;
– Claims for furlough days in November 2020 must be submitted by 14 December 2020.
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