The Coronavirus Job Retention Scheme (CJRS) has, today (5 November 2020), been further extended to 31 March 2021 (from 2 December 2020) to assist businesses (whether open or closed) and their employees through the winter period.
Employers wishing to continue to furlough one or more eligible employees will need to gain the consent of their employee for the period of furlough in question and “confirm in writing” that the employee has been furloughed.
The employee does not have to provide a written response; however, it is good practice for the employer and employee to keep a record of what has been agreed to avoid any ambiguity or potential misunderstanding at a later date.
If there was an agreement in place that stipulated that the Scheme, and the benefits associated to it, would cease on either 31 October or 2 December 2020 (extension announced by the Government on 31 October), the employer should confirm in writing to the employee that their period of furlough; whether full or flexible, has been further extended (where applicable) until, potentially, 31 March 2021.
The furloughed employee must not carry out any work for an organisation that is connected to the furloughing employer; albeit they can take part in training, volunteer for another employer or organisation, and work for another employer (unless the employee’s contract of employment permits otherwise).
From 1 November 2020 to 31 March 2021, the Government will pay 80% of a furloughed employee’s wages, up to a cap of £2,500. Employers will pay employer National Insurance (NI) and pension contributions only for the hours the employee does not work. However, the Government will review the balance of contributions under the Scheme from January 2021, which may require companies to contribute towards employees’ 80% salary, whilst continuing to meet NI and pension contributions.
Flexible furloughing will be allowed in addition to full-time furloughing and employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
Employees must have been on their employer’s PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission, notifying payment for that employee to HMRC must have been made on or before 30 October 2020.
- Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
- Employers can claim the grant for the hours 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 will need to report and claim for a minimum period of seven consecutive calendar days.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and national insurance (NI) contributions due on those amounts.
Under the terms and conditions of the Coronavirus Job Retention Scheme, employers must make sure that the furlough agreement is consistent with employment, equality, and discrimination laws.
Employer’s must all keep a written record of the agreement for five years, along with how many hours flexi-furlough employees work and the number of hours they are furloughed (i.e. not working).
Notice period in event of redundancy
An employer can make an employee redundant while they are on furlough; however, the UK Government is reviewing whether employers should be eligible to claim for employees serving notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November. To view the current guidance on Gov.UK, click employers or employees.
Job Retention Bonus
The Job Retention Bonus (£1,000), which was due to come into effect from 15 February 2021, has been postponed until further notice due to the extension of the Coronavirus Job Retention Scheme (until 31 March 2021).
How to Claim?
If you do not finish your claim in one session, you can save a draft. You must complete your claim within 7 days of starting it. If you want to delete a claim in the online service, you must do this within 72 hours of starting it.