The Chancellor has announced an extension of the furlough scheme to 31st March 2021, but there are some notable changes from 1st November 2020 which we have summarised below.
From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
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Coronavirus Job Retention Scheme
Employers can claim under the scheme even if they have never used the CJRS before or have not furloughed the employees before, and there is no limit on the number of employees who can be furloughed.
You can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
Claims for each month have to be submitted by the 14th of the following month.
The government will review the scheme in January 2021 – which indicates that if the economy has improved that we may see a reduction in the grant available from February.
All employers with a UK bank account and UK PAYE schemes can claim the grant.
You do not need to have previously claimed for an employee before the 30 October 2020 to claim grants for them from 1 November 2020.
If, from 1 November 2020, you had notified employees that they would be placed on the JSS schemes, you could change them to the furlough scheme provided that a retrospective agreement was put in place but you had to complete this by the end of Friday 13 November 2020. This backdated agreement will be dependent on the employee genuinely having been furloughed during this time.
Employers do not have to top up the 80% grant received. For periods from 1 November 2020, you will only need to pay for the cost of employer NICs and pension costs.
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
fully furlough employees – they cannot undertake any work for you while furloughed full time
flexibly furlough employees – they can work for any amount of time, and any work pattern but they cannot do any work for you during hours that you record them as being on furlough
Although flexible furlough agreements can last any amount of time, unless otherwise specified the period that you claim for must be for a minimum claim period of seven calendar days.
For employees on fixed term contracts which has not already expired, it can be extended or renewed:
You can put the employee on furlough as long as they were employed by you on or before 30 October 2020. You must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
If the employee’s fixed term contract expired after 23 September, they can be re-employed and claimed for as long as the other relevant eligibility criteria are met.
If you made employees redundant, or they stopped working for you on or after 23 September 2020, you can re-employ them and put them on furlough as long as you made a PAYE RTI submission for them to HMRC between 20 March 2020 and 30 October 2020.
You can continue to claim for a furloughed employee who is serving a statutory notice period up to 30 November, however, grants cannot be used to substitute redundancy payments.
You cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation).
Employees who are clinically extremely vulnerable or have caring responsibilities resulting from Coronavirus can be furloughed.
Shielding – from 5th November, the Government has re-introduced shielding and will be writing to those identified as previously to advise that they should work from home; if this cannot be accommodated, employers can place them on furlough.
Maternity – If your employee decides to end their maternity leave early to enable them to be furloughed (with your agreement), they will need to give you at least 8 weeks’ notice of their return to work, but you can agree to shorter notice in certain circumstances. This has not been defined at this stage. You will not be able to furlough them until the end of the 8 weeks, or the date that you have agreed they can return to work.
From December 2020, HMRC will publish the names of companies who have made claims under the scheme for the month of December onwards.
The Job Retention Bonus has been postponed. Instead, the government says a retention incentive will be “deployed at the appropriate time”. To find out more contact Willis Employment Services.