Employment Law: Further extension to the Job Retention Scheme
Employment Lawyer and guest blogger Matt Jenkin looks at the recently announced extensions of the COVID-19 Job Retention Scheme.
The UK Government has announced a further extension to the Coronavirus Job Retention Scheme as part of its financial support for businesses in light of the new lockdown restrictions. The CJRS (or the furlough scheme as it is often called) was due to close on 31 October 2020. This was then extended to 2 December 2020 and has now been further extended to 31 March 2021.
The key points to note are:
- For furloughed employees, the Government will pay 80% of wages for hours not worked, up to a cap of £2,500 per month (with the cap being proportional to the hours not worked). This is a more generous contribution than we saw in September and October, with the Government then contributing 70% and 60% respectively. Employers will have to pay National Insurance contributions and employer pension contributions for these hours. Employers will have to pay the employee for any hours that they do work;
- The Government will review the contribution rate in January 2021 with a view to deciding if employers should be asked to contribute more to access the scheme;
- Employers can, with the agreement of the employee, fully furlough employees (which means they do no work) or flexibly furlough employees (which means that they can work for any amount of time and work pattern with the employer claiming payment for the unworked/furloughed hours);
- The same restrictions on furlough that applied previously will continue to apply, for example, during hours which employees are recorded as being on furlough, they cannot do any work for their employer that makes money or provides services for their employer;
- Neither the employer nor the employee needs to have previously claimed under the CJRS to make a claim under the extended furlough scheme. Employers can claim for employees on their PAYE payroll on 30 October 2020;
- Employees who were made redundant or stopped working after 23 September 2020 can be re-employed and claimed for. However, re-hiring could bring with it various complications, for example re-payment of redundancy pay;
- As with the original furlough scheme, employers will make claims for payment to HMRC via their on-line claims portal;
- The Job Support Scheme , which was due to come into force on 1 November 2020, as a replacement to the CJRS, has been postponed; and
- The Job Retention Bonus, which would have seen employers being able to claim £1,000 per furloughed employee still employed as at 31 January 2021 is now not being paid. Instead, the Government has announced that that it will redeploy a retention incentive at “the right time”.
Further details about the extended CJRS can be found here - https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme with more details to be published on 10 November 2020.
For more information on any of the topics covered, please contact Matt Jenkin ([email protected]) directly, or contact your usual Howden Consultant.
Please note that information and any commentary contained in this article is provided for information purposes only and does not, and is not intended, to constitute legal advice to any person on a specific case or matter. Every reasonable effort is made to make the information accurate and up to date, but no responsibility and correctness or for any consequences of relying on it, is assumed by the author or its publisher.
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