The extended furlough scheme

Posted on: November 6th, 2020

The announcement of a national lockdown and extension of the Coronavirus Job Retention Scheme (CJRS) only a few hours before it was due to expire will present fresh problems for employers who are already navigating tricky waters.

On the one hand the furlough extension will come as a relief to many who are having to close their business or remain significantly impacted during lockdown. On the other hand, it may pose problems for those who have made redundancy decisions based on furlough ending on 1st November, or those who had reached agreement with returning employees to work under the (now delayed) Job Support Scheme.

Whilst the guidance for this latest furlough extension has not yet been issued by the government, we do know the following:

    1. The extended furlough scheme is available from 1 November (not from when lockdown begins on 5th) and will last until 31 March 2021
    2. The level of support for November to the end of January is the same as it was in August i.e 80% of wages up to a cap of £2,500. So it is not simply a continuation of the wages being paid in October where the amount that could be claimed had been winding down. The percentage being offered for February and March 2021 will be reviewed nearer the time.
    3. You do not need to have previously used the CJRS to be eligible
    4. The employee must have been on the employer’s PAYE payroll by 23:59 on 30 October 2020
    5. The scheme can be used for full furlough or flexible furlough

 

Any agreements that you had reached with employees under the Job Support Scheme which you had expected to start this week, should be ignored. Employers will not be able to claim support under this scheme as it has been replaced by the extended CJRS. Employees are unlikely to complain about this as the CJRS is more generous, however, it could be unsettling for employees who were expecting to return to work, and are now being furloughed again so this should be managed sensitively.

This new period of furlough could be used as an opportunity to manage excess holiday balances, with some holiday days being allocated in this period. Employers would need to top up to full pay for any holiday, but can still claim the 80% from HMRC as long as the employee hasn’t been furloughed simply to cover holiday.

If you have been consulting regarding redundancies prior to this announcement, then you may also want to consider if retaining staff for a further period is justifiable.

As a final thought, this will be an unsettling time again for your employees in terms of mental or financial health, particularly those who had geared up to a return to the workplace after months away, and who are now facing another potentially lengthy period of isolation. Your employees will understand that what is happening is largely out of your control, and that very last minute decisions are having to be made, however you are able to control how it is communicated and the support you can put in place to help with the effect of these decisions.

If you have any questions about the content of this article, please do get in touch with the Employment Team at Coffin Mew.