05.11.2020
After the announcement of the November extension of the Coronavirus Job Retention Scheme (CJRS) on 31 October, the Chancellor, Rishi Sunak, has announced today (5 November 2020) a further extension to the CJRS until the end of March 2021.
The Government states that the purpose of this further extension is to enable support to be in place for long enough to help businesses recover and get back on their feet – as well as giving them the certainty they need in coming months.
The Government has published an announcement and a policy paper on the extension of the CJRS. More detailed guidance will be provided on 10 November, but the Government has confirmed that since this is an extension of the CJRS, the scheme rules will remain the same as they were previously except where the applicable guidance says otherwise.
We are in the process of updating our FAQs on the Make UK website but, in the meantime, the key points to note about this further extension of the CJRS are as follows:
- The CJRS will be extended until 31 March 2021.
- Employers across the UK can claim, whether their businesses are open or closed. We therefore assume that the extension will apply across all areas, regardless of their alert level. (Note however, that the announcement does indicate that further details will be published next week about which employers are eligible).
- Employers do not need to have used the CJRS previously and employees do not need to have previously been furloughed to be eligible. However, employees must have been employed and on the employer’s PAYE payroll on 30 October 2020 (although see the point below regarding employees who have recently left employment).
- Significantly, employees who were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for – if you have made a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees. Similarly, employers can re-employ and claim for an employee who was on a fixed term contract, on payroll on 23 September, whose contract expired after 23 September, provided that the other eligibility criteria are met.
- To be eligible for the grant under the extended CJRS, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed.
- Provided it is consistent with employment law and is made in accordance with the conditions set out in the policy paper on or before 13 November, a flexible furlough or full furlough agreement can be made retrospectively to have effect from 1 November 2020.
- Employees who are furloughed will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked.
- Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase their contributions.
- Businesses will have flexibility to use the scheme for employees for any amount of time and shift pattern, including furloughing them full-time.
- For employees who were previously eligible for the CJRS, the calculation rules will remain the same as under the CJRS prior to 31 October.
- If an employee was not previously eligible for CJRS, 80% of wages must be calculated as follows:
- employees on a fixed salary - 80% of the wages payable in the last pay period ending on or before 30 October 2020
- employees whose pay varies - 80% of the average payable between (these dates are inclusive) the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins
- Employees can be furloughed where they are unable to work because they:
- are shielding in line with public health guidance (or need to stay at home with someone who is shielding); or
- have caring responsibilities resulting from coronavirus, including employees that need to look after children.
- The extended CJRS will operate as the previous scheme did, with businesses being able to claim either shortly before, during or after running payroll. Claims can be made from 8am Wednesday 11 November. Claims made for November must be submitted to HMRC by no later than 14 December 2020. Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim.
- The Job Retention Bonus (JRB) will not be paid in February and the Government has stated that it will redeploy a retention incentive at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the CJRS is being extended to the end of March 2021, the policy intent of the JRB falls away.
- The launch of the Job Support Scheme has been postponed because of national developments related to the Coronavirus pandemic.
How we can help
We are in the process of updating our FAQs on our website. We will, of course, update them again after the more detailed guidance has been published (which we expect to be on 10 November 2020).
Make UK had prepared a number of template letters for employers to use when seeking employees’ agreement to full or flexible furlough under the extension to the CJRS as it was announced on 31 October to the lockdown in England, which we referred to as the Lockdown Extension Scheme. We are also in the process of updating these templates to take into account the longer period for which furlough will now be available. However, if you had already sent them, you may wish to contact employees to inform them of the extension of the CJRS until 31 March 2021, but you will not need to revise the letters themselves as the wording anticipates a possible extension to the CJRS.
If you are a Make UK member, please feel free to contact your adviser with any queries you wish to discuss. Throughout the pandemic we have been advising our members on a full range of Coronavirus related queries, including self-isolation, home-working and the data protection implications of Covid-19 on HR practices.
Alternatively, non-members are welcome to call us on 0808 168 5874, or email [email protected].
Finally, look out for our vlog, Lockdown Lowdown: The Headlines for HR Managers. It covers the new rules of lockdown in England, the implications for employees who are shielding and this latest extension to furlough.