Extension of Furlough Scheme until December 2020

It was announced on 31^st October 2020 that in light of the national lockdown, the Coronavirus Job Retention Scheme (CJRS of Furlough Scheme) would be extended and remain open until December 2020.

This means the Job Support Scheme will be postponed until the Furlough Scheme comes to an end.

The Furlough Scheme will be increased to the level that it was at in March 2020 and therefore more favourable than in October at the planned end of the scheme.

Employers will again be able to claim up to 80% (or £2,500) for each employee for the hours not worked. The employer is only responsible for covering tax, NI and contributions.

The government update states that employers will be able to bring employees back flexibly (flexi-furlough) while using the Furlough Scheme. For more information from the Government website, click here.

Important points to note on extended furlough scheme:

• All employers with a UK bank account and UK PAYE scheme will be eligible. Publically funded organisations are not able to use the scheme; partially funded organisations may be able to.
• Employees must be on the PAYE payroll by 23.59 on 31^st October 2020 and RTI submission made for that employee before 30^th October 2020.
• Neither the employee nor the employer need s to have previously used the Furlough Scheme. You can put employees on furlough who have not previously been on furlough.
• There will be no gap in eligibility for the furlough scheme between end October and wage costs in November.

In light of the announcements in respect of a second national lockdown commencing in a number of days, businesses have tough and quick decisions to make. In relation to employees you have the following options:

1. Work from home where the job allows. This may still involve reaching an agreement over adapted duties, hours or pay from home;
2. Long or short term changes to terms i.e. reducing hours or pay;
3. If the job cannot be done at home or the work is not there – place employees on furlough. This may be full furlough i.e. for all normal hours or flexi furlough. As before, you will need to agree this with your employees and follow up in writing so you have a record of the agreement; or
4. Consider whether redundancies will be necessary and start the process. Depending on the amount of redundancies, a collective process may become necessary. In any redundancy process and employer is required to consider all the options as to how to avoid redundancies.

In these tough times, we are here to help and our HR/employment law team is here to provide advice. Please do not hesitate to get in touch for a free consultation on: kate.brooks@ellisjones.co.uk or 01202 057754.