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    Further extension to the Coronavirus Job Retention Scheme

    Further extension to the Coronavirus Job Retention Scheme

    Chancellor, Rishi Sunak has today announced that the Coronavirus Job Retention Scheme will run until 31 March 2021 (not December 2020 as previously suggested). HMRC has issued a policy paper with more details, although the full guidance is not expected to be published until 10 November 2020.

    What we understand in the meantime, is that the government will cover the cost of 80% of eligible employees’ usual salaries for hours not worked, up to a maximum of £2,500 per month, proportional to the unworked hours. This will relate to the claim periods running to January 2021. Then in January 2021, the government will review and decide whether employers should be asked to contribute more during February and March.

    Employees who were previously furloughed will continue to have their furlough pay calculated based on existing furlough calculations. However, employees who have not been furloughed before will have a different pay/hours reference period which we understand will be based on either:

    • 80% of the wages payable in the last pay period ending on or before 30 October 2020 (for those on a fixed salary), or
    • 80% of the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins (for those whose pay varies)
     

    In our last bulletin we explained that:

    • Employers with a UK bank account and UK PAYE scheme can claim the CJRS grant and neither the employer nor the employee need to have previously used CJRS. However, the employee must be on the employer’s payroll by 23:59 on 30 October 2020;
    • Employers will be able to flexibly furlough employees, (i.e. put them on part-time furlough) as well as put employees on full-time furlough;
    • Employers must report and claim under the CJRS for a minimum period of 7 consecutive calendar days; and
    • The Job Support Scheme which was due to come into force on 1 November 2020 has been postponed.
     

    From reading the HMRC policy paper, this all appears to remain the case. We also now understand that:

    • Employees that were employed and on the employer's payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date, can be re-employed and claimed for under the extended CJRS; and
    • The Job Retention Bonus which was due to be paid in or around February 2021 will no longer be paid. Instead, the government is expected to put in place a different retention incentive, at the appropriate time… whatever that means?!
     

    It also remains the case that employees need to agree to be put on furlough leave and employers must have confirmed to their employee in writing that they have been furloughed or flexibly furloughed in order to claim the CJRS grant. Please see the HMRC Policy Paper at para 3.2 for further details.

    If you need any assistance with ensuring your business’ compliance with the various requirements of CJRS/Furlough leave, please do not hesitate to get in touch with a member of our Employment Law Team.

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