The Job Retention Scheme is back
The Coronavirus Job Retention Scheme is back
The Coronavirus Job Retention Scheme (CJRS) has been extended for a month with employees receiving 80% of their current salary for hours not worked. We await detailed guidance on a number of key points but highlights of the government’s announcement about the Extended Furlough Scheme are:
- The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends
- Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, the Government states accounts for 5% of total employment costs for the hours not worked. Employers should seek fresh consent from employees for the latest furlough extension in case of an HMRC audit
- This extended CJRS will operate as the previously, with businesses being paid upfront to cover wages costs. There will be a short period when the government needs to change the legal terms of the scheme and update the system and businesses will be paid in arrears for that period.
- We do not yet know what reference periods to use when calculating payroll for employees with no fixed hours. Employers will have to offer work or furlough staff without being able to assess the cost benefit of either option.
- The level of the grant will mirror levels available under the CJRS in August, so the government will pay 80% of wages up to a cap of £2,500. Grant money can be used to fund holiday costs provided that employers top up wages to 100%.
- Flexible furloughing will be allowed in addition to full-time furloughing.
- To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020. This is good news as the CJRS will be open for new recruits which missed out on the first scheme. However, we have not yet been informed what the pay reference period is for this cohort.
- When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days. This is intended to streamline the process by reducing the number of grant claims being made by employers, which is sensible.
- Employers should continue to pay the employee for hours worked in the normal way. It’s not yet clear whether CJRS payments can be used to fund notice periods.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.