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Employment
Tuesday 3rd November 2020 Julie Edmonds 

Important update - Extension to the ‘Furlough’ scheme

The Coronavirus Job Retention Scheme (CJRS) was due to come to an end on 31st October 2020. Following the Prime Minister’s press conference on Saturday 31st October, it has been confirmed that the scheme will now be extended until December 2020 to further support businesses through the second national lockdown that is expected to cover the period from Thursday 5th November until Wednesday 2nd December 2020.

WHAT SUPPORT WILL NOW BE AVAILABLE?

The level of support available under the extended scheme mirrors the support for employers under the CJRS in August, with the Government paying 80% of wages up to a cap of £2,500. It means that the extension to the scheme is more generous than it was in October. Flexible furloughing is still permitted under the extended CJRS which mean that employees can be on furlough full time or work on a part time basis.

Key features of the extension include:

  • Neither the employer nor the employee need to have previously used the CJRS.
  • Employees need to have been on their employer’s PAYE payroll by 23:59 on 30th October 2020.
  • Employers can claim the grant for the hours that their employees are not working, calculated by reference to their usual hours worked in a claim period.
  • Employers need to report and claim for a minimum period of 7 consecutive calendar days.
  • For hours not worked by the employee, the Government will pay 80% of wages up to a cap of £2,500, which must be paid to the employee in full.
  • Employers will pay employer national insurance and pension contributions on the furlough pay.
  • Employers must continue to pay for any hours worked by the employee in the normal way.
  • Employers can still choose to top up employee wages above the furlough grant.

WHAT ABOUT THE JOB SUPPORT SCHEME?

The Job Support Scheme (JSS) was due to run for 6 months from 1st November 2020 and has been designed to support businesses with their employees’ wages if employees are unable to work their normal hours due to a downturn in business or in some cases for those businesses forced to close.

The government has confirmed that the introduction of the JSS has been postponed until the CJRS ends.

WHAT ABOUT THE SELF EMPLOYED?

It had already been confirmed that the Self Employment Income Support Scheme (SEISS) had been extended to cover the six months between November 2020 and April 2021. However, the government announced on 2nd November 2020 that in order to reflect the extension to the CJRS announced on 31st October, self-employed individuals claiming under the SEISS will receive 80% of their average trading profits for November with the claims window being brought forward from 14th December to 30th November so that payments can be processed quicker.

NEXT STEPS

This announcement came on the day that the CJRS was due to end and therefore some employers are likely to have already taken steps to utilise the JSS. Employers may therefore need to consider the following scenarios in order to benefit from the extension to CJRS as soon as possible:

  • For employers that already have a JSS agreement in place with an employee, they will need to contact the employee to seek their agreement to now be furloughed until December instead, as this will represent a financial advantage to the employee.
  • For employers that have employees on furlough and had not taken steps in relation to the JSS, they should seek agreement from the furloughed employees to extend the existing flexible furlough arrangement until December on the existing terms in relation to furlough pay and hours.
  • For employers whose employees have been working as normal but whose business will now be affected by the second lockdown and had not therefore already taken steps in relation to the JSS, they will need to seek agreement from their employees to be placed on furlough until December and set out the arrangements in relation to pay and hours.

As before, any agreement between an employer and employee in relation to furlough should be recorded in writing.

If you have any questions about the extension to the CJRS, the JSS or how the two schemes will interact, please contact Julie Edmonds, Head of Employment, by email on jedmonds@jpclaw.co.uk; telephone on 0207 644 7286 or contact her on LinkedIn.

Disclaimer

All articles on this website do not necessarily cover every aspect of a topic and are designed for information purposes. Reliance should not be placed on their contents without specific legal and financial advice first being taken.

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