This update follows our previous article on the extension of the Coronavirus Job Retention Scheme.
The UK Government has now published detailed guidance on how the extension to the Coronavirus Job Retention Scheme (CJRS) will operate until its planned end date on 31 March 2021. The guidance is broadly the same as the previous CJRS guidance with key changes set out below. The CJRS remains a UK-wide scheme, and therefore not restricted to particular sectors, regions or individual nations within the UK. It will also be open to eligible employers regardless of whether or not they have previously furloughed staff. The CJRS grant payable by the Government reverts to 80% of wages but employers will need to make NI and pension contributions on the furloughed pay.
All employers can use the new CJRS, providing that they have a UK bank account and are set up with UK PAYE. Claims can be made for employees who were employed on 30 October 2020 as long as there has been a PAYE Real Time Information (RTI) submitted in respect of that employee between 20 March 2020 and 30 October 2020. There is no need to have previously claimed for an employee before 1 November 2020, and there is no restriction on how many employees can be placed on furlough. To check if you can claim for your employee’s wages, the Government’s guidance can be found here.
On Friday (13 November 2020), the Treasury published its fifth Direction to HMRC on the operation of the CJRS, which can be found here.
For those employees which were not previously furloughed
It is possible to furlough and flexibly furlough employees who have been placed on the furlough scheme before. For those who have not been furloughed before 1 November 2020, the calculation period for working out their normal wage will be the last pay period ending on or before 30 October 2020.
As a reminder, employers should discuss any changes to employment contracts with their staff and all changes should be made in writing. Employers should keep a written record of the agreement for five years. When employers are making decisions in relation to furloughing employees, including deciding whom to offer furlough to, equality and discrimination laws will apply in the usual way.
Claiming during notice period
The Government is changing its approach to reimbursing furlough pay costs for employees serving notice periods whilst on furlough. The guidance on this can be accessed here.
The Treasury Direction states that, with effect from 1 December 2020, an employer can no longer claim in respect of an employee who is serving out notice of termination of their employment between 1 December 2020 and 31 January 2021.
In relation to November 2020, it remains unclear whether an employer can claim for employees who are working a contractual notice period. The eligible employees guidance refers only to claims in respect of furloughed employees who are serving their statutory notice period, whereas the employees' CJRS guidance states that an employer can continue to claim for employees claiming a statutory or a contractual notice period.
As before, the grants cannot be used to substitute redundancy payments. If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, you will need to make an adjustment. Guidance on making an adjustment can be found here.
Employers should remember the need to follow a fair process before they can give notice of redundancy which may include collective consultation lasting a minimum of 45 or 30 days depending on the number of redundancies.
Important deadlines for employers
There are now tight deadlines for making claims for a grant under the scheme:
- Claims for the month of November 2020 must be submitted by 14 December 2020
- Claims for the month of December 2020 must be submitted by 14 January 2021
- Claims for the month of January 2021 must be submitted by 15 February 2021
The Government is yet to decide whether employers will require to contribute more to furlough costs for February and March 2021.
How can we help?
If you have any questions in relation to the extension of the CJRS and what this means for your business, please contact our specialist Employment team.
This article was co-written by Nikita Sandhu, Trainee Solicitor.