Coronavirus Job Retention Scheme (CJRS): Extension
On Saturday, 31 October 2020, the UK Government announced a further national lockdown to run from 5 November 2020 until 2 December 2020. As a result, the Prime Minster confirmed that the Coronavirus Job Retention Scheme (CJRS) would be extended, albeit in a slightly amended form, in order to preserve the jobs of those who would otherwise have been laid off unpaid or made redundant as a result of the lockdown.
Following the announcement, the Government published a Treasury Direction setting out how the Government intends to support businesses, employers and employees during the national lockdown.
Unfortunately, at present, detail is limited, but additional guidance is expected to follow in the next couple of days.
What is the amended eligibility criteria?
- Employer Eligibility: To be eligible for the extended CJRS, employers must have a UK bank account and UK PAYE scheme. Neither the employer nor the employee needs to have engaged with the CJRS previously to qualify for the extended scheme.
- Employee Eligibility: Employers can only claim for employees who were on their PAYE payroll on or before 30 October 2020. This means that a Real Time Information (RTI) submission, notifying payment to HMRC, must have been made on or before 30 October 2020 for each employee furloughed under the extended CJRS. Any type of employee can be furloughed, whether employed full or part time, on a permanent or fixed term contract and even those on zero hours contracts. As before, employers can choose to furlough their employees in full or utilise flexible furlough.
- Wage Grants: Employers can claim 80% of their employees’ wages, up to a maximum of £2,500.00 per month, from the date on which they finish work and commence a period of furlough leave. Employers can choose to top up their employees’ wages but are not obliged to do so. The employer must however, pay National Insurance Contributions (NICs) and pension contributions for employees who are furloughed.
- Flexible Furlough: As before, employers can flexibly furlough their staff but must pay them at their full rate for any hours worked.
- Holiday: Employees must be paid at their full rate of pay if they take annual leave whilst furloughed (ie: the employer can continue to claim 80% of wages from the CJRS but must ensure they top up the employees’ wages to full pay).
- Minimum Claim Periods: Employers claiming via the CJRS for furloughed hours must ensure that the claim period covers a minimum of seven consecutive calendar days.
- Agreements: An employee must agree to be furloughed (whether in full or flexibly) in writing in advance. Such a written agreement must be entered into prior to the employee commencing a period of furlough. Agreements should be varied if significantly changed, for example, if an employee moves from full to flexible furlough.
- What will happen to the Job Support Scheme (JSS)? The JSS, scheduled to commence on Sunday, 1 November 2020, has been postponed until the CJRS ends.
What we don’t know:
- Claims: The Government will shortly confirm when employers are able to submit claims for furloughed employees in respect of employee wage costs during November 2020.
What else is available for businesses who are required to close?
In addition to the CJRS extension, the Government will provide businesses who are forced to close in England, with a grant of up to £3,000.00 per month under the Local Restrictions Support Grant.
Mortgage holidays, due to cease on 31 October 2020, will no longer end, meaning homeowners can also continue to request holiday payments on their mortgages. Further information should be requested from mortgage providers.