The Coronavirus Job Retention Scheme (CJRS), which HM Treasury put in place to protect viable jobs during the ongoing pandemic, was due to come to an end on 31 October 2020 and was to be replaced by the Coronavirus Job Support Scheme (CJSS).
During the Government’s press conference, however, the Prime Minister confirmed that the CJRS would be extended through to 02 December 2020 and that the CJSS would be postponed to a later date.
Further and more detailed guidance on precisely what this means is still awaited, but the Treasury press release, which can be found here, outlines the eligibility rules for the extended CJRS.
Much of what the press release contains will be familiar to employers, although there are some notable differences to the current form of the existing scheme, which they should be aware of.
Who is eligible?
The extended scheme will be open to all employers with a UK bank account and UK PAYE schemes. Affected employees need not have been previously furloughed and, in fact, the employer need not have made a claim through the scheme before.
So long as the affected employees were on the employer’s PAYE payroll by 23:59 on 30 October 2020 they will be eligible for furlough.
Employers will need to report and claim for a minimum period of seven consecutive days and employees cannot undertake any work for the employer during the time that they are recorded as being on furlough.
What will be paid?
The Government will pay 80% of furloughed employees’ wages for non-worked hours up to a maximum of £2,500 per month.
Employers will now only be required to pay National Insurance and employer pension contributions, however should they wish, they may still top up employees’ wages above the 80% provided by the Government.
Flexible furlough remains in place so that furloughed employees can do part-time work to meet reduced business needs.
To make a claim for flexible furlough, employers will need to report the hours that the employee has worked and the usual hours that they would be expected to work in the claim period. The employer will then pay 100% of the wages for the hours work by the employee, and the Government will pay 80% of the wages (up to a maximum of £2,500 per month) for the hours not worked.
Practical steps employers should take
Whilst the Government are yet to confirm precisely what is required of employers who wish to make a claim under the extended scheme, it is reasonable to assume that they will be subject to similar obligations as under the original CJRS.
Where an employer proposes using the extended scheme, they should set out in writing the new changes to the employee’s contract of employment and seek to obtain their agreement. Current CJRS guidance suggests that employers do not need to obtain a written response from the employee.
Please note, the information included in this update is correct at the date of publishing.