The chancellor has today (5 November) announced that the Coronavirus Job Retention Scheme (CJRS), otherwise known as furlough, will be extended to 31 March 2021, with employees to continue to receive 80% of their usual salary, capped at £2,500.
The majority of this will be paid by the government; employers will only be required to cover national insurance and pension contributions.
This will be reviewed in January 2021 and a decision made at that time as to whether employer contributions should be increased.
Employers do not need to have used the CJRS previously, nor is it limited to those employees who were furloughed before. Any business can use the scheme, whether they are required to close as a result of government restrictions or not.
To be eligible, an employee must have been on the payroll as at 30 October 2020. Employees can be flexibly furloughed, i.e. doing some work for their employer and furloughed for the rest of the time, or fully furloughed and employers will be able to vary the arrangement depending on the needs of the business, in agreement with the furloughed employee.
Employers will have to pay the employee for any hours that they do work. As before, whilst furloughed an employee cannot do any work for their employer and employers must have an agreement in writing with the employee that they are to be furloughed, and a record of this must be kept for at least five years.
It has been confirmed that employees who are shielding can be furloughed, or if they have caring responsibilities resulting from coronavirus, such as for childcare reasons, although the latest guidance specifies that the CJRS is not intended to cover short term absences.
The latest guidance also specifies that employees who have been made redundant since 23 September 2020 can be re-employed and claimed for under the CJRS, although there is no obligation on an employer to agree to do so.
As a result of the extension of the CJRS, the Job Support Scheme, which was due to come into effect from 1 November 2020, has been postponed.
Similarly, with the government focus now shifting once again to short-term job preservation, the Coronavirus Job Retention Bonus, under which employers were to receive a £1,000 bonus per employee retained until 31 January 2021, will also be postponed.
The chancellor has pledged that a new retention incentive would be deployed at an appropriate time.
Employers will be able to claim under the CJRS from 8am on 11 November 2020. Full guidance on the claims process is expected on 10 November 2020.
In the meantime, if you have any queries please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.