Furlough Scheme extended and Job Support Scheme postponed

Wake Smith Solicitors 02 November 2020

On Saturday evening the Prime Minister announced that the Coronavirus Job Retention Scheme (CJRS) or furlough scheme will be extended and now remain open until 2 December 2020.

However, the furlough scheme will change and there will also be additional business grants potentially available.

Around 10 million jobs have had furlough subsidy claimed for them and there are approximately 2 million roles still furloughed as at the end of October.

Whilst we await additional guidance about the now extended furlough scheme, what can we glean so far from the Government’s most recent announcement?

Joan Pettingill, Director and Head of Employment & HR Services at Wake Smith, highlights the main points.

The concept of furlough is being extended until 2 December 2020;
Neither the employee nor the employer need to have previously used the CJRS;
Importantly, employees only need to have been on payroll On 30 October 2020 with an RTI submission notifying payment to HMRC on or before 30 October 2020;
The current furlough scheme arrangements will end as at 31 October 2020 and the Government has said there will be no gap between that scheme and this new extended furlough arrangement;
We await the date from which the first claims for subsidy under these new extended furlough arrangements may be made;
The extended furlough scheme will be more generous for employers than the last furlough arrangements where employers had to top up 20% of wages with 60% coming from Government. Under extended furlough the Government may top up to 80% subject to a £2,500 pcm cap;
Extended furlough subsidy can be claimed for hours the employees aren’t working and flexible furlough may be agreed. Remember that furlough is a government scheme and that ordinary employment laws apply when changing employment arrangements such as pay and hours;
Employers will still pay NIC and employer pension contributions for hours the employee does not work;
The Job Support Schemes (JSS) – of which there are two different schemes – and which were due to come into effect from Sunday 1 November will not start on 1 November. JSS has been postponed. If you have put in place JSS agreements new agreements for extended furlough may be needed instead;
CJRS payments may still be claimed upfront (which is better than the proposed JSS arrangements would have been);
Claiming employers will need to report and claim for a minimum of 7 consecutive calendar days and report the usual expected hours of work in the claim period following “broadly the same” methodology as under the previous CJRS (so we await further details on this aspect);