Legal briefing | Employment |

Furlough Scheme Extended Further

Overview

The Chancellor has today announced that the Coronavirus Job Retention Scheme (CJRS) is being further extended until the end of March 2021. 

The CJRS, which was due to close on 31 October 2020, had already been extended to cover the four-week national lockdown and will now continue until 31 March 2021. The CJRS will continue to fund 80% of wages up to a cap of £2,500 per month but this will be reviewed in January 2021.

The CJRS provides a Government-funded wage subsidy for employers who place staff on full or partial furlough (paid leave). Under the CJRS, employees on furlough must receive at least 80% of their regular wages for hours not worked up to a full-time maximum of £2,500 per month.

Following today's announcement:

  • The CJRS will now run until 31 March 2021.

  • All employers of all sizes with a UK bank account and a PAYE scheme are now able to use the CJRS, whether or not they have previously put staff on furlough.

  • All employees are eligible for furlough, provided they were on the payroll as at 30 October 2020 (i.e. they were notified to HMRC on an RTI submission on or before 30 October 2020). There is no requirement for the employee to have been on furlough previously at any point.

  • Employees dismissed after 23 September 2020 can now be rehired and placed on furlough provided they were on the payroll as at 23 September 2020 (i.e. they were notified to HMRC on an RTI submission on or before 23 September 2020).

  • The Government will pay 80% of wages up to a cap of £2,500 for employees on furlough for any hours not worked until at least 31 January 2021. The Employer will not have to contribute to this subsidy but will be responsible for employer NICs and pension contributions on the full amount paid to employees. For partial furlough, employers will also have to pay full pay for any hours worked.

  • The amount of the Government subsidy will be reviewed in January 2021 to determine whether employers should be asked to contribute more to the wage subsidy from February 2021 onwards.

  • Employers will be able to submit claims for the CJRS subsidy from 8am on 11 November and will be required to submit claims within 14 days of the end of the month to which the claim relates.

  • Employers will use the same calculations for usual wages and hours for employees who have previously been on furlough. For employees not previously eligible for furlough, usual wages and hours will be calculated as at 30 October 2020 or, for those with variable wages or hours, the average of tax year 2020/21 up to the start of furlough.

  • In the light of the CJRS extension, the Job Retention Bonus will fall away. Under the Job Retention Bonus, the Government was due to pay employers £1,000 for every employee returning from furlough and retained in employment until 31 January 2021. The Chancellor has said that an alternative job retention incentive will be considered at the appropriate time.

For more details on the CJRS extension see our full Q&A briefing here.

If you would like to discuss the impact of these changes on your business, please speak to your usual Employment team contact.