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Extension of CJRS (furlough scheme) until March 2021

Having recently extended the Coronavirus Job Retention Scheme (CJRS) from 1 November 2020 until 2 December 2020, the Government announced on 5 November 2020 that the CJRS will be extended further until 31 March 2021. This extension will apply to all parts of the UK.

Eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500.00 per month. ‘Flexible furlough’ will continue to be permitted, in addition to full-time furlough, meaning that businesses have flexibility to use the scheme for employees for any amount of time and any work pattern, while still being able to claim for the hours not worked.

Employee eligibility

Neither the employer nor the employee needs to have previously claimed under the CJRS to make a claim under the extended CJRS. An employer can claim for employees who were employed and on their payroll on or before 30 October 2020.

It has been confirmed that employees whose employment ended or who were made redundant after 23 September 2020 can be re-employed and will still be eligible for the furlough scheme, so long as the employee was on the payroll on or before 23 September 2020. It is important to note that this will be at the discretion of the employer and that there could be employment law implications if employees are re-hired.

Employer contribution

Employers will only be asked to cover National Insurance and pension contributions for hours not worked. Employers will not need to contribute to wages for hours not worked. The policy will be reviewed in January 2021 to decide whether employers are asked to contribute more from then onwards.

Payment

The extended CJRS will operate as the previous scheme did, with businesses being able to claim either shortly before, during or after running payroll.

Job Support Scheme

The Job Support Scheme, which was due to start on 1 November 2020, has been postponed in light of the extension of the furlough scheme. It is currently not known when this will be implemented, if at all.

Job Retention Bonus

The Job Retention Bonus will now not be paid in February 2021. The Government had planned to award a one-off taxable payment of £1,000.00 to employers that brought back employees who had previously been furloughed. The Government has said that they will look to redeploy a retention incentive at some point in the future, although the specifics and timings of this are currently unknown.

This extension of the CJRS is likely to be welcome news for many businesses, as the extended scheme is more generous than the scheme that was running from September up until now. It is important that employees have an up-to-date furlough agreement in writing. Further guidance is expected to be published on 10 November 2020. In the meantime, if you have any questions, please do not hesitate to contact Ben Dos Santos on ben.dossantos@rlb-law.com or Sejal Raja on sejal.raja@rlb-law.com


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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