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We have collated here the key information relating to the recently extended CJRS (furlough scheme) that is intended as general guidance. If you require specific legal advice, please book your Free consultation call with one of our team of employment law specialists.
First published: 16 November 2020
16 November 2020: First Published
Since making its initial announcement on 5 November 2020 that the CJRS (furlough scheme) would be extended until 31 March 2021, the government published a variety of guidance documents including a Policy Paper (5 November) and the Extended Furlough Guidance (10 November), which itself was amended within 48 hours of being published. Then on 13 November, HM Treasury published its fifth Treasury Direction, which together with the previous Treasury Directions, form the legal framework for the CJRS (furlough scheme).
As the legal framework for the CJRS (furlough scheme) the fifth Treasury Direction:
From the plethora of existing documents published prior to the latest Treasury Direction, we were already aware that the extended CJRS would operate in many of the same ways as it operated in its original iteration until the end of August 2020, but there were some key differences between the pre-and-post extension that Employers should be aware of, namely:
Whilst the rules published in the latest Treasury Direction cover a wide range of issues including eligibility, furlough agreements, permitted activities during furlough, business succession (including TUPE) and publication of CJRS claimants’ details, they also cover claim periods; reference salaries and calculating the usual hours of work, the key points of which we’ve noted below:
Since 1 November 2020, employers are able to furlough employees on a flexible basis if they were on their PAYE payroll before midnight on 30 October 2020. The employer must have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for any employee being claimed for. Neither the employer nor the employee needs to have used the CJRS previously.
The level of support available under the extended scheme, which currently runs until 30 April 2021, will initially mirror that available under the CJRS in August, with the government paying 80% of wages for hours not worked up to a cap of £2,500 per month for claim periods running to 31 January 2021.
The grant and cap will be reduced in proportion to the hours not worked by an employee. Employers will need to cover employer NICs and employer pension contributions on all amounts paid to an employee (including those amounts covered by the CJRS grants). They will also need to continue to pay an employee for hours worked in the normal way. As previously under the CJRS, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
The government will review the operation of the CJRS in January 2021, to determine whether the economic circumstances are such that employers should be asked to contribute more.
Since 1 December 2020, employees under notice are no longer eligible and from February 2021, HMRC will also start to publish information about employers who submit claims in December and January, in order to provide greater transparency and deter fraud.
The JSS has been postponed as a result of the extension of the CJRS. It is not currently known whether it will be introduced after the CJRS ends. The JRB was withdrawn by the fifth Treasury direction following the extension of the CJRS.
HMRC published updated guidance regarding the extended CJRS on 10 November 2020, and the fifth Treasury direction on 13 November 2020 (dated 12 November 2020). Guidance for claim periods from February 2021 onwards, as well as a further Treasury direction, have not yet been published.
The Fourth (latest) Treasury Direction
HM Treasury Policy Paper
Extended Furlough Guidance
Check if you can use the CJRS
Check which employees you can put on furlough
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