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Employment
Thursday 5th November 2020 Julie Edmonds 

‘Furlough’ scheme extended to March 2021

It’s only a couple of days since our last update on the Coronavirus Job Retention Scheme (CJRS) but the Chancellor has today confirmed that the extension to the scheme, that was due to run until December 2020, will now run until the end of March 2021.

WHAT DO YOU NEED TO KNOW?

We are still waiting for the full guidance on the extension to the scheme which is due to be published on 10th November 2020, but what we know so far from the HMRC Policy Paper is:

  • Neither the employer nor the employee need to have previously used the CJRS.
  • The scheme will be reviewed in January when it is expected to be decided if employers should start contributing again as they did in August, September and October.
  • It will apply across the whole of the United Kingdom.
  • Flexible furlough will continue which means that employees on furlough can continue to do some work for their employer and can be on furlough for the remainder.
  • Employees who have been furloughed before, continue to have their reference pay and hours calculated based on the existing furlough calculations.
  • Employees who have not been furloughed before will have a different reference period for pay and hours. The detailed guidance expected next week will confirm how these payments will be calculated but those with fixed wages are expected to be based on 80% of the wages payable in the last pay period ending on or before 30th October 2020 up to a maximum of £2,500 per month as before.
  • If you have an employee who is shielding or needs to stay at home with someone who is shielding, they can be furloughed. However, if they are able to work from home then they can continue to do so and do not have to be furloughed.
  • The Self-Employment Income Support Scheme (SEISS) will also be increased, with the third grant covering November 2020 to January 2021 and will be calculated at 80% of average trading profits, up to a maximum of £7,500.

WHAT IF AN EMPLOYEE HAS ALREADY BEEN MADE REDUNDANT?

There has been significant criticism of the government and its support for businesses already affected by local lockdowns, many of which are likely to have already had to make difficult decisions about redundancies and retaining their staff. It has been confirmed that employees who were employed and on the payroll on 23rd September 2020 and have been made redundant or have stopped working for their employer after that date, can now be re-employed and furloughed. However, the decision to re-employ a member of staff is complex and will raise the same questions for employers who may have been asked to do this back in the spring with the CJRS was first introduced.

WHAT ABOUT THE JOB SUPPORT SCHEME?

The Job Support Scheme (JSS) and the Job Retention Bonus that was due to be paid in January 2021 have now both been put on hold and we await further updates in relation to whether these schemes will be reintroduced and what they may look like.

If you have any questions about the extension to the CJRS and managing your workforce generally through the second national lockdown, please contact Julie Edmonds, Head of Employment, by email on jedmonds@jpclaw.co.uk by telephone on 0207 644 7286 or contact her on LinkedIn.

Disclaimer

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