Mr Sunak has confirmed that employees will continue to receive 80% of their usual salary for hours not worked (up to a maximum of £2,500 per month) until the end of January 2021 via the extension of the Job Retention Scheme.
It isn’t currently clear whether the 80% figure will be reduced down after January but we do know that the scheme will remain open until as late as 31 March 2021.
The government is due to produce a full guidance note next week which will clarify exactly how the scheme will operate. Until then, HMRC has produced a policy paper, which you can read here. A brief summary of the key points contained within it is below:
- The scheme will be more generous to employers, who will no longer have to top up any of the 80% pay. The government have confirmed that they are covering all furlough pay until the end of the January claim period.
- It seems the Job Support Scheme and the Job Retention Bonus have been postponed for now, although not entirely ruled out in the future.
- Employees who were previously on furlough leave and due to return to work on 31 October can stay on furlough. They should not see any change in their pay.
- Any employees that were employed and on the payroll as of 23 September 2020 and who were then made redundant or stopped working for their employer after that date can be re-employed and claimed for.
- The furlough will continue to be flexible in the same way it was during the August-October period. This means employees will be allowed (and indeed encouraged) to do some work if they are needed to.
- Employees who have previously been furloughed continue to have their reference pay and hours based on the existing furlough calculations (as under the old scheme).
- It does not matter if the employer or employee had not previously used the CJRS. New employers will be able to claim for the November to March furlough period. However, employees who have not previously been furloughed will have a different pay/hours reference period. It is currently believed that pay will be based on 80% of the wages payable in the last pay period ending on or before 30 October 2020 (for those on fixed wages), or 80% of the average payable between the start date of their employment and the day before their CJRS extension furlough periods begins (for those on variable wages).
- It will be possible to place staff on furlough even if they are shielding at home as a result of public health guidance.
If you would have further questions regarding any of the points raised by the extension of the Job Support Scheme for employers or you wish to speak to a member of the Employment team, please do not hesitate to call 01603 598000 or email email@example.com. Appointments are available at our Norwich, Diss and London offices or your offices by appointment.
**Furlough Scheme Update: 18th December 2020
Rishi Sunak, the Chancellor of the exchequer, has announced that the government’s #furloughscheme is being extended for an extra month, and will now end on 30th of April 2021. For further information, you can visit the government’s website here: https://www.gov.uk/government/news/chancellor-extends-furlough-and-loan-schemes
*The information provided in this article is designed to provide useful information on the subject, not to provide specific legal advice.