Furlough Scheme extension announced

The announcement of a second national ‘lockdown’ by Prime Minister Boris Johnson on 31 October 2020, starting from Thursday 5 November 2020 for a period of 28 days, was accompanied by a raft of additional financial measures to support businesses and employees during this period. For employers, the announced extension to the Coronavirus Job Retention Scheme (CJRS), currently to 2 December 2020, will be welcomed.

Guidance on the new national restrictions was published on 31 October 2020, setting out details of what individuals and businesses are required to do during this period. It sets out those businesses required to close from 5 November 2020, including non-essential retail, leisure and hospitality businesses. Those who can work effectively from home are now required to do so, and those who are categorised as ‘clinically extremely vulnerable’ (previously required to shield) and who are unable to work from home are now advised not to go into work. Such individuals may be eligible to SSP or Employment Support Allowance. Further guidance for those who are clinically extremely vulnerable is expected very shortly.

The Government’s CJRS was due to end on 31 October 2020, to be replaced by the Job Support Scheme (JSS) (see our previous article). The CJRS will now remain available until at least 2 December 2020, and the start of the JSS will now be delayed until the furlough scheme ends.

Full details and guidance on the extended CJRS has not yet been published, but this is what we know so far:

• The extended CJRS will be open to new entrants who have not previously been furloughed, provided they were on the employer’s payroll before midnight on 30 October 2020. A Real Time Information (RTI) submission must have been made in respect of the employee on or before 30 October. An employer does not have to have previously made a claim under the CJRS.
• The scheme is available to employees on any type of contract, and employers will be able to claim under the scheme in respect of any hours not worked by the individual, calculated according to their usual working hours. Employers can require employees to work part time and claim in respect of any unworked hours, as permitted under the ‘flexible furlough scheme’, or employees can be fully furloughed.
• As previously under the rules of the CJRS, employers can claim for a minimum period of seven consecutive calendar days.
• Amounts claimed under the extended scheme will reflect the level available to employers in August, meaning that the Government will pay up to 80% of an employee’s wages, up to a maximum of £2,500 per month. Employers will be required to pay employer National Insurance Contributions and pension contributions. They can elect to top up employees’ pay if they are able to do so.

The Government will shortly publish further information on making claims under the extended CJRS, but the intention is that there will be no gap in eligibility between the original end date of 31 October 2020 and the extension.