On Saturday 31 October 2020, the Government announced new national restrictions in England from 5 November 2020 until 2 December 2020 and in response to the financial implications of that, confirmed the extension of the Coronavirus Job Retention Scheme (the Extended CJRS). The Government has since announced that the Extended CJRS will remain open until 31 March 2021.
Under the new restrictions, employees who can work from home should do so. Employees who are clinically extremely vulnerable (i.e. the Shielding category) are being strongly advised to work from home if they can but not to work at all if they can’t work from home.
Although the Extended CJRS guidance is awaited and is due to be published on 10 November 2020, HMRC has published a Policy Paper which confirms that under the Extended CJRS:
- Employees can be flexibly furloughed or be furloughed on a full-time basis.
- Furloughed employees will receive 80% of their current salary for hours not worked, up to a maximum of £2,500, proportional to the hours not worked (the same rates as were available in August 2020). This will be reviewed in January 2021 to decide whether economic circumstances are improving enough to require employers to contribute more.
- At least until 31 January 2021, employers will only bear the costs of paying the employee’s wages for the hours worked plus the employer National Insurance and pension contributions on the full amount paid to employees (including the CJRS grant). So this takes us back to the August 2020 position. Employers will not be obliged to top up an employee’s wages to 100%.
- Employers do not need to have used the CJRS previously. The details of which employer make claims will be published.
- Employees who participate in the Extended CJRS do not need to have been furloughed before. However, they must have been on the payroll on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.
- There is no minimum furlough period.
- Changes to employment contracts must be made by agreement and written confirmation of being furloughed must be provided to employees.
- For employees who were eligible for the original CJRS, the rules around pay and hours will remain the same as under the original scheme. However, for those employed on or after 20 March 2020 the calculation will be based on the wages payable in the last pay period ending on or before 30 October 2020 (for those on fixed wages), or the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their furlough periods begins (for those on variable wages). Their ‘usual hours’ will be the contracted hours worked in the last pay period ending on or before 30 October (if fixed hours) and the average hours worked between the start of the 2020/21 tax year and the day before their furlough begins (if variable hours).
- Employees who were made redundant or their fixed-term contract expired after 23 September 2020 can be re-employed and claimed for under the Extended CJRS provided the employer has made a RTI submission notifying payment for that employee to HMRC between 20 March 2020 and 23 September 2020.
- As with the original CJRS, the Government expects that publicly funded organisations will not use the CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted.
- Employers will need to report and claim for a minimum period of seven consecutive calendar days.
- Employees can be furloughed if they are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or if they have caring responsibilities resulting from coronavirus. Note there is a slight contradiction between this guidance on furlough and the revised guidance on shielding (see below) which says that those who live with someone who is shielding should follow the general guidance.
- The closing date for claims up to and including 31 October 2020 remains 30 November 2020. Employers will be able to claim under the Extended CJRS from 11 November 2020; claims for November should be made by 14 December 2020, for December should be made by 14 January 2021 and so on.
- The Job Support Scheme has been postponed. The Job Retention Bonus will not be paid in February; a replacement retention incentive may be introduced in due course.
As of 5 November, the Government is strongly advising that until the period of restrictions end, individuals who are clinically extremely vulnerable should work from home and where this is not possible, they should not work at all. If they are unable to work for this reason, the Government has confirmed that they may be entitled to statutory sick pay or could be furloughed in accordance with the Extended CJRS (see above). The Government has confirmed it will write to each clinically extremely vulnerable person to set out detailed advice while the new restrictions are in place. Many have already received their letters.
As before, individuals who are considered clinically extremely vulnerable include those with specific cancers, rare diseases, heart diseases, severe respiratory conditions etc. and those who have been added to the Shielded Patients List because a hospital clinician or GP believes they are deemed to be at higher risk of serious illnesses if they catch the virus.
The Extended CJRS will come as welcome news for many employers and employees alike; employers will be pleased that the cost-sharing burden has reverted to a more generous Government contribution than it had been scaled back to in October and employees who have recently joined their employers will be able to benefit. However whilst the extension ought to at least defer some redundancies, it still won’t be able to save every job.
Employers should be aware, that as before, furlough needs to be by agreement, confirmed in writing and various records retained. We will report on the Extended CJRS guidance in due course, but if you have any questions in the meantime, please contact any member of the team.