The Extension of the Coronavirus Job Retention Scheme (CJRS)
18th November 2020
HM Treasury confirmed on 5 November that the U.K. wide CJRS (“the Scheme”) will be extended until March 2021, with a review of the level of contributions from the government set for January. The extension of the Scheme naturally means that the Job Support Scheme, which was due to commence on 1 November, has been postponed until further notice. Here is the link to the latest Government Guidance dated 5 November 2020:https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
Here is the link to the latest Treasury Direction dated 12 November 2020:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/935146/201112_CJRS_DIRECTION_No_5___CJRS_extension_1_Nov_-_31_Jan__SIGNED.pdf
Who is eligible?
Any employee who was on the payroll on 30 October 2020 will be eligible for the Scheme which officially commenced on 1 November. It is immaterial if the employee is employed on a full-time, part-time or zero-hours basis. As was the case in the recent versions of the furlough scheme, an employee can be furloughed ‘part-time’, receiving usual full pay for the hours they do work and reduced, subsidised, pay as set out below for the hours they don’t.
What are the government’s contributions?
The government will contribute 80% of an employee’s usual pay, capped at £2,500, with the employer remaining responsible for employer National Insurance and compulsory pension contributions. Akin the previous iterations of the furlough scheme, the employer can ‘top-up’ the employees pay if they choose to do so. As alluded to above, the government has confirmed that the level of their contributions will be reviewed in January, meaning that current level of contributions from the government are not guaranteed beyond that review.
Conditions of the furlough scheme
As with the Scheme which was in place until 31 October, employers will require to enter a written agreement with their employees before putting them on the Scheme. The agreement is a variation to the contract of employment. For those employers who have such agreements in place there is no need to enter another but we are recommending that employers inform employees in writing that the agreement will remain in force during the extension of the Scheme.
As before, an employee cannot carry out any work for their employer whilst they are on furlough. For employees who are placed on ‘part-time furlough’, they cannot carry out any work during any period which they are noted as being furloughed by their employer. For employees with varied pay, their usual pay will be calculated by taking the average of their pay from (the later of) 6 April 2020 and the start date of their employment, to the day before their furlough period begins.
A noteworthy new condition is that by making a claim under the Scheme, an employer agrees that certain details may be published online by HMRC. These details can include the name of the employer and the amount claimed for. The only exception to this condition is if HMRC are satisfied that an individual may be at risk of intimidation or violence if the details are published.
All claims for a particular month must be made by the 14th of the following month i.e. all claims for November 2020 must be made by 14th December 2020. It is also worth bearing in mind that claims can be made in advance, as well as in arrears.
An important change has been introduced in relation to employees under notice of termination of employment during the period of extension of the Scheme. Employees are no longer entitled to claim notice payments under the Scheme for periods of notice on or after 1 December 2020. Any change in an employee’s employment contract (including entering into the furlough scheme), must be agreed upon in writing.
Please remember that we at Wright, Johnston & Mackenzie LLP are here to help, so please don’t hesitate to get in touch if there is anything you think we can help with.
For any advice in relation to any particular aspects of the above, please contact a member of the Wright, Johnston & Mackenzie Employment Team: Andrew Wilson (firstname.lastname@example.org), Martin Stephen (email@example.com), Liam Entwistle (firstname.lastname@example.org) and John Grant (email@example.com).
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