On 31 October the Treasury announced that the UK Government’s Coronavirus Job Retention Scheme (CJRS), or Furlough, has been extended to 31 March 2021. Guidance and a further Treasury Direction on how the scheme will continue to operate have now been released, with details of how to claim for periods from 1 November 2020 to 31 January 2021.
In addition to the detail previously announced in our news article, Furlough scheme extension announced, further key points for employers to consider when deciding which employees to claim for are noted below:
Claims for periods ending on or before 31 October 2020 - the last day employers can submit or change claims is 30 November 2020. Employers will need to contribute towards the cost of furloughed employees’ wages for these periods.
Deadlines for later claims - claims for periods after 1 November must be submitted within 14 calendar days after the end of month the claim relates to, unless a weekend, when it is the following working day.
Claim limits from 1 November - there is no maximum number of employees that employers can claim for.
Employees on fixed term contracts:
- Fixed term contracts live at 30 October - From 1 November 2020, employees whose fixed term contract has not already expired can have that contract extended or renewed and they can be put on furlough provided they were employed on or before 30 October 2020.
- Fixed term contracts expiring after 23 September – these employees can be reemployed and furloughed.
- For both, the employer must also have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings.
Redundant employees:
- Employees made redundant (or who stopped working for the employer) on or after 23 September 2020 can be re-employed and placed on furlough. They must have been employed and on PAYE payroll on or before 23 September 2020, meaning an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.
- Employees subsequently made redundant should have their statutory redundancy and statutory notice entitlement based on their ‘normal’ wage rather than the reduced furlough wage.
Notice periods:
Claims for November – employers can still claim the grant for furloughed employees serving statutory notice but CJRS grants cannot be used to substitute redundancy payments.
Claim periods starting on or after 1 December 2020 - employers will not be able to claim for days on which the furloughed employee was serving a contractual or statutory notice period (including retirement or resignation). If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, employers will need to make an adjustment.
Returning from maternity leave:
For claims starting after 1 November normal scheme rules apply.
If an employee decides to end their maternity leave early to enable them to be furloughed (with their employer’s agreement) they will need to give at least 8 weeks’ notice of their return to work and the employer will not be able to furlough them until the end of the 8 weeks.
Employees unable to work due to Covid-19 affecting their circumstances – clinically extremely vulnerable employees who cannot work because they are following Public Health Guidance or have caring responsibilities resulting from coronavirus can be furloughed.
Publication of CJRS claimant employer details - HMRC must publish details of employers who have received CJRS grants from December 2020, including name of the employer and the amount of the CJRS claim.
We recommend that employers who will either continue or begin using the CJRS from 1 November contact employees in writing to explain the new or ongoing changes to their terms of employment and agree those changes before the furlough period starts. Written records of the agreement should be kept on file for 5 years.
Employers who are considering redundancies should also take note of the deadline of 1 December when the approach to notice pay changes.
Additional, detailed guidance is also available on steps employers should take before calculating CJRS claims, how to calculate wages and finally, how to claim. The full guidance is available here and Treasury Direction here.
If you would like advice regarding your particular situation, we’d be happy to help.
