Furlough graphic

Following the Government’s announcement at the weekend on extending the Coronavirus Job Retention Scheme until 2 December, they have now further extended it until 31 March 2021.

Under the extended scheme the Government will pay 80% of wages for hours not worked, up to a cap of £2,500, and employers will pay National Insurance contributions and pension contributions for those hours (as was the case in August 2020 before the tapering down began).

Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern and will be able to vary the hours worked in agreement with the employee.

Neither the employer nor the employee needs to have previously claimed or have been claimed for under the CJRS to make a claim under the extended CJRS.

An employer can claim for employees who were employed and on its PAYE payroll on 30 October 2020. Employees who were made redundant or stopped working after 23 September 2020 can be re-employed and claimed for.

Lockdown impact on business

The extension reflects evidence that the economic effects of lockdown for businesses are much longer lasting than the duration of any restrictions.

The Job Retention Bonus will not now be paid in February, its policy intent seems to have fallen away. However, we understand a retention incentive will be deployed at the appropriate time.

Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim.

The scheme will be reviewed in January 2021 to decide whether economic circumstances are improving enough to ask employers to increase contributions.

If you or your business would like some HR or employment related advice, please get in touch. We’d be happy to help.

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Author Zee Hussain

Associate Director, Corporate Law

Zee is an experienced and trusted solicitor providing commercially focused advice to businesses, directors and senior executives, throughout the UK, on all aspects of employment law.

Learn more about Zee Hussain

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