Extension of the CJRS12 November 2020
"The scheme has become more generous for employers than it has been since August. The government will now contribute the full 80%, rather than contributing 60% with employers topping up to 80%."
The CJRS was set to come to an end on 31 October 2020 and be replaced by the Job Support Scheme (JSS), the details of which we have outlined in previous articles. However, given the current lockdown in the UK, the government has decided that the CJRS (also known as the furlough scheme) will remain open until 31 March 2021 and the JSS will not commence at the beginning of November as planned.
The rules of the CJRS from now until January 2021 have been announced. For claim periods running to January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportionate to the hours not worked. Employees will not notice any difference in their pay packet, but the scheme has become more generous for employers than it has been since August. The government will now contribute the full 80%, rather than contributing 60% with employers topping up to 80%.
The government will review the policy in January to decide whether economic circumstances are improving enough to ask employers to contribute more.
- Employers across the UK can claim whether their business is open or closed and they do not need to have used the CJRS previously;
- Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee;
- Employers will have flexibility to use the scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee. When employers are making decisions in relation to the CJRS process, including deciding to whom to offer furlough, employment, equality and discrimination laws will apply in the usual way;
- As under the current CJRS rules, employees can be on any type of employment contract and do not need to have been furloughed under the CJRS previously;
- For employees that meet the eligibility criteria and were previously furloughed, or who meet the eligibility criteria and were not previously furloughed, reference pay and usual hours should be calculated in the same way as under the previous CJRS;
- For an employee who meets the criteria of the extended scheme but was not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used:
a) If an employee was not previously eligible for CJRS, wages must be calculated as follows:
i) for an employee on a fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020; and
ii) for an employee whose pay varies – 80% of the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins (these dates are inclusive).
b) usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, will be the contracted hours worked in the last pay period ending on or before 30 October 2020; and
c) usual hours for an employee who worked variable hours will be the average hours worked between (these dates are inclusive):
i) the start date of the 2020 to 2021 tax year, (for example, 6 April 2020); and
ii) the day before their CJRS extension furlough period begins.
"As under the current CJRS rules, employees can be on any type of employment contract and do not need to have been furloughed under the CJRS previously."
- Employees can be furloughed where they are unable to work because they:
a) are shielding in line with public health guidance (or need to stay at home with someone who is shielding); or
b) have caring responsibilities resulting from coronavirus, including employees that need to look after children.
- The CJRS is not intended for short-term sickness absences. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees. Furloughed employees who become ill, due to coronavirus or any other cause, must be paid at least Statutory Sick Pay (SSP). As under the CJRS previously, it is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate;
- Employees that were employed and on the payroll on 23 September 2020 who were made redundant, or stopped working for their employer afterwards, can be re-employed and claimed for;
- As under the CJRS previously, during hours which employees are recorded as being on furlough, they cannot do any work for their employer that makes money or provides services for their employer or any organisation linked or associated with their employer. They can take part in training, volunteer for another employer or organisation, or work for another employer (if contractually allowed);
- Employees will retain their employment rights whilst on furlough and will continue to accrue leave as per their employment contract. Employees can also take holiday whilst on furlough and will be entitled to their usual full pay including additional amounts over the government grant;
- Employees will still pay the taxes they normally pay out of their wages. Employers must deduct and pay to HMRC Income Tax and employee National Insurance contributions on the full amount that they pay the employee, including any scheme grant. As before, the CJRS grant does not cover employers’ National Insurance contributions or pension contributions;
- Employers can claim under the CJRS in the same way as before. Employers will be able to claim from 8am on Wednesday 11 November 2020. Claims can be made:
"Employees that were employed and on the payroll on 23 September 2020 who were made redundant, or stopped working for their employer afterwards, can be re-employed and claimed for."
a) in respect of an employee for a minimum seven-day claim window;
b) in advance; and
c) in arrears for the period from 1 November 2020 to 11 November 2020.
- Claims relating to each subsequent month should be submitted by day 14 of the following month, to ensure prompt claims following the end of the month which is the subject of the claim. The closing date for claims up to and including 31 October remains 30 November 2020.
Finally, the Job Retention Bonus (JRB) will not be paid in February 2021 and a retention incentive will be deployed at the appropriate time. The purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the CJRS is now being extended to 31 March 2021, the policy intent of the JRB no longer applies.