Employment Law Update - Extension of Furlough Scheme

posted by Helen Bull

In a very last minute announcement on Saturday evening, the Prime Minister announced that the Coronavirus Job Retention Scheme (CJRS) (or furlough scheme, as we know it) will be extended until December 2020 (although the precise date is unclear). This means that the Job Support Scheme (JSS) that was due to come into effect as of 1st November 2020 has now been delayed until the CJRS comes to an end. The extended CJRS became available as of 1st November.

Set out below is a summary of the extended furlough scheme:

  • Under the extended CJRS, the government will pay up to 80% of an employee’s normal pay, up to a cap of £2,500 a month (employers can choose to top up employee wages if they wish). Employers will remain responsible for National Insurance contributions and pension contributions.
  • Employee’s can either be put on furlough on a full-time basis, or on a part-time basis (i.e. flexible furloughing).
  • Neither employers nor employees need to have previously used the CJRS to be eligible for the extended scheme.
  • In order to be eligible, employees must have been on their employer’s PAYE payroll as of 23:59 on 30th October 2020. This is good news for those employees that did not previously qualify for the furlough scheme, such as recent starters for example.
  • When claiming under the CJRS for furloughed hours, employers must report and claim for a minimum period of 7 consecutive calendar days.If you have already put in place JSS Agreements, or your workforce is back at work and you would like to place some employees back on furlough / put new staff on furlough, you will need to contact those employees as soon as possible to obtain their written agreement. Please do let us know if you would like draft communications to send to your employees.

This is welcome news for many employers given that the extended furlough scheme is more generous than the JSS which was due to come into place on 1st November. You will recall that the JSS was divided into two elements, JSS Open (for businesses operating but where employees are working at least 20% of their usual hours) and JSS Closed (where the business is legally required to close its premises and employees have no work to do at all). Under the JSS Closed, the government would have paid 67% of employee wages, up to a maximum of £2,083.33 a month. Under JSS Open the position was more complex but the government contribution was capped at a maximum of £1,541.75 per month and the employer contribution was capped at £125 per month.

We hope that this is of interest and useful for you. If you need further information relating to this topic, please feel free to contact a member of our team on 029 2034 5511 or at employment@berrysmith.com