CJRS extended to March 2021
Major changes to employee’s support during COVID-19 have been announced by the Chancellor. The Job Support Scheme has been postponed and the Coronavirus Job Retention Scheme (furlough) is being extended until March 2021.
Following its extension until 2 December announced on 31 October, the Chancellor has today (5 November) that the furlough scheme paying 80% of wages capped at £2,500 per month is going to be in place until 31 March 2021 but the employer contribution (currently employer’s NI and pension) will be reviewed in January 2021 - see HMRC announcement. We have been promised further details on 10 November.
The Job Retention Bonus (JRB) will not be paid in February 2021 and a retention incentive will be deployed 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 now being extended, the policy intent of the JRB no longer applies
A few key points:
- There is no minimum period of furlough, only a minimum claim period of 7 consecutive calendar days, so employers cannot claim every couple of days.
- Employers can back date their furlough agreement to 1 November provided they do this by 13 November.
- Those who are shielding can be furloughed – the HMRC announcement says that those who are in the same household as those shielding can also be furloughed although the guidance on shielding now says that those in the same household do not have to shield.
- Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for.
- HMRC rather unhelpfully says: ‘The terms of any agreement must 1. reflect the hours the employee has actually worked or not worked over the period of the agreement 2. allow the employer to satisfy the terms of CJRS so they can make a claim in relation to hours not worked'. This rather defeats the object of a flexible furlough scheme where you can adjust the workforce depending on need if you need to set out hours in advance and appears to ask you to be able to predict the future.
- As before, the employee does not need to agree in writing but needs to be notified in writing. However, obtaining the employee’s written agreement will avoid potential unlawful deduction from wages claims.