HM Treasury announced on Saturday 31 October 2020 that the CJRS (also known as the furlough scheme) will be extended until December and that the introduction of the Job Support Scheme (‘JSS’) which was due to take its place will now be delayed.
Support for employers
Under the extended CJRS HM Treasury will pay 80% of wages of furloughed employees up to a monthly cap of £2,500. Employers will have to pay employer pension contributions, national insurance and tax contributions. This mirrors the level of support available to employers under the CJRS back in August.
Employers are still able to top up furloughed employees’ salaries if they chose to do so.
Importantly, it will not be necessary for employers to have previously furloughed workers in order to access the extended CJRS.
Provided the furloughed employees were on the employer’s PAYE payroll as at 23:59 on 30 October 2020 the employer can claim in respect of the contractual hours they are furloughed.
Employers will need to claim for a minimum of 7 consecutive calendar days.
The extended CJRS remains flexible in allowing employers to bring staff back part time and in allowing employers to make a claim in respect of casual or part time employees by reference to their hours worked. The method of calculation for the latter will be the same as currently under the CJRS.
As previously under the CJRS, HM Treasury has stated it does not expect publicly funded organisations to use the extended CJRS as their revenue should remain unaffected by the Covid-19 pandemic. However partially publicly funded organisations with private revenue streams that have been disrupted may be able to use the scheme.
Wales, Northern Ireland and Scotland have all had and continue to have varying degrees of lockdown prior to the announcement from the Prime Minister on 31 October 2020. Employers based in these areas can take advantage of the extended CJRS.
The Job Support Scheme (JSS)
Employers will be aware JSS was due to begin in November with varying degrees of support, contingent on a particular area’s level of lockdown. This has now been delayed and will begin at the end of the extended CJRS (subject to any further extension).
The Job Retention Bonus (JRB)
HM Treasury has yet to provide detailed guidance on the effect of the extended CJRS scheme on the JRB. It remains to be seen whether employees not previously furloughed but on payroll at 23:59 on 30 October 2020 and furloughed under the extended scheme would be a qualifying employee for the £1,000 bonus under the JRB.
Next Steps for Employers
Its likely many employers have taken steps to bring furloughed employees back to the workplace in anticipation of the end of the CJRS. Employers should note that any extension of existing furlough arrangements or the re-furloughing of employees in light of the extension of the CJRS will amount to a variation of the employee’s contract of employment and should be agreed in writing with the employee.
Geldards’ employment team remain available should you require assistance with this.
It is understood that further guidance from HM Treasury will follow. The Geldards Employment team will publish any developments as and when they are announced. In the meantime, if you require further advice please contact a member of the team.
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