Furlough Scheme Extended.

2nd November 2020 Employment

On the 31st October the Prime Minister announced that the furlough scheme (the Job Retention Scheme) will be extended until December. The announcement was made as part of the Government’s plan to protect people and business in response to the coronavirus outbreak. It was a very last minute change to policy given that the curtailed CJRS was due to end at midnight on 31st October!

Under the extended scheme the government will pay up to 80% of the employee’s normal pay for hours not worked, up to a maximum of £2,500 per month. Although there is a need for more detail, employers will be responsible for NIC’s and pensions contributions (unlike the original CJRS) and will still be able to choose to top up employee wages above the scheme grant should they wish to do so. This means the extended scheme is more generous than it was in October. Under the October scheme, the maximum government contribution was 60% of the employee’s current salary up to a cap of £1,875 per month with the employer contribution being 20%, up to a maximum of £625 per month.

Under the extended scheme, will ‘flexible furlough’ continue? Yes. Employers can continue to allow their employees to work part-time and receive a furlough grant for unworked hours. We await further details from the Government this week on this. 

Which employers can claim the grant? As under the previous scheme, neither the employer nor employee need to have previously used the CJRS. Therefore, all employers with a UK bank account and UK PAYE system can claim the grant.

Which employees are eligible for the extended furlough scheme? Employees must have been on the employer’s PAYE payroll by 23:59pm on the 30th October 2020. This means that a Real Time Information submission notifying payment for that employee must have been made to the HMRC by 23:59pm on 30th October 2020. Importantly, this allows employers to place new starters on the scheme providing they meet the specified criteria. We await further details from the Government on when the grant will be available.

What does this mean for the Job Support Scheme (the scheme that had been designed to replace the CJRS)? The Government has announced that to avoid running two scheme simultaneously, the Job Support Scheme will be delayed. We await further details in relation to the precise date that the extended scheme will end and be replaced by the Job Support Scheme.

If you need advice or have any queries about dealing with any workplace issues arising from the COVID-19 outbreak, please contact Paul Chamberlain or another member of the employment team at JMW Solicitors LLP on 0345 241 5305.

This note is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as legal advice. 

JMW Solicitors is a Limited Liability Partnership. The copyright in this note is owned by JMW. Any reproduction of this article should be credited to JMW. All rights reserved.

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Lauren Scott is a Trainee Solicitor located in Manchesterin our Trainee Solicitors department

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Paul Chamberlain is a Partner and Head of Department located in Manchesterin our Employment department

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