Furlough extended and Job Support Scheme postponed

As a result of England’s lockdown beginning on Thursday 5 November 2020, the Government has announced that the furlough scheme will be extended and, in turn, the Job Support Scheme postponed.

Coronavirus Job Retention Scheme (CJRS) extended

Over the weekend, HM Treasury announced that the CJRS, which was due to come to an end on 31 October 2020, would be extended in order to provide support to businesses and employees during the new lockdown in England. England’s lockdown is due to begin on Thursday 5 November and is set to last until 2 December. The CJRS therefore remains available to businesses as of 1 November and will be open until December. The level of support available under the extended scheme mirrors that available under the CJRS in August, with the Government paying 80% of wages up to a cap of £2,500.

Are there any differences between the old CJRS and the extended version?

Under the extended scheme, the cost for employers who retain workers will be reduced compared to the previous furlough scheme. This means the extended furlough scheme is more generous for employers than it was in October.

CJRS extension – eligibility

This extended Job Retention Scheme is intended to operate as the previous scheme did, with businesses being paid upfront to cover wages costs.

Neither the employer nor the employee needs to have previously used the CJRS and the scheme is available in respect of employees who were on the employer’s PAYE payroll before 23:59 on 30 October 2020. Employers can claim the grant for the hours that their employees are not working, calculated by reference to their usual hours worked in a claim period. When claiming the CJRS grant for furloughed hours, employers need to report and claim for a minimum period of seven consecutive calendar days. For hours not worked by the employee, the Government will pay 80% of wages up to a cap of £2,500, which must be paid to the employee in full.

Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way. As previously under the CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.

Flexible furloughing is allowed under the extended CJRS, as well as full-time furloughing. The Government will confirm shortly when claims can first be made in respect of employee wage costs during November.

Does the furlough extension apply to Scotland?

There has been much debate on whether the extended furlough applies to Scotland. It has, however, been confirmed that the extended scheme will be available to Scotland, England, Northern Ireland and Wales. Debate still continues in relation to whether the scheme will only be available to the devolved nations for the duration of an English lockdown (until 2 December 2020).

The Finance Secretary, Kate Forbes, stated: “Despite discussions, the UK Treasury continue to deny our request that full furlough at 80% be made available for businesses and employees in Scotland at any point we need it, suggesting that it is only available for the duration of a lockdown in England.”

Further details of the extension can be accessed here – but key questions remain unanswered. We will provide a further update when the new Treasury Directions are published.

Job Support Scheme (JSS) postponed until December

As a result of the CJRS extension, the Job Support Scheme has been postponed until the end of England’s lockdown. The Government has not yet confirmed if the Job Support Scheme will immediately kick in, but it is likely that it will come into force when the CJRS closes.

The Job Support Scheme is designed to help employers keep their staff employed and avoid redundancies throughout the pandemic. The scheme provides two separate levels of support: first, “JSS Open” for employers facing lower demand over the winter months due to the COVID-19 pandemic; and second, the “JSS Closed” for those employers that are legally required to close their premises as a direct result of local or national COVID-19 restrictions.

Please note: this update was accurate on 3 November 2020.

Be prepared for the Job Support Scheme

Employers should be prepared for when the JSS comes into effect in December – listen online to our latest MacRoberts Live Bitesized podcast, where our Employment team explain everything you need to know about the Job Support Scheme.

Please note: this content was accurate on 30 October 2020.

This article was co-written by Nikita Sandhu, Trainee Solicitor.

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