Extended Coronavirus Job Retention Scheme (CJRS): Guidance Update
On Thursday, 5 November 2020, the Chancellor, Rishi Sunak, announced that the Coronavirus Job Retention Scheme (CJRS) will remain open until 31 March 2021 and that, unless stated otherwise, the rules of the scheme will remain the same throughout.
The Government’s extended CJRS guidance has now been released in full and we summarise the changes below.
Extended CJRS: what are the changes?
Employer Eligibility: Employers across the UK are eligible to claim under the extended CJRS providing they have a UK bank account and a UK PAYE scheme and irrespective of whether their business is open or closed. 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 between 20 March 2020 and 30 October 2020 for each employee furloughed under the extended CJRS. The guidance also confirms that employees who have been re-employed after 23 September 2020 can be claimed for providing other relevant eligibility criteria is met. 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.
Maximum Number of Employees: In respect of claims made on or before 31 October 2020, the amount of employees an employer can claim for in each claim period starting from 1 July 2020 must not exceed the maximum number of employees they claimed for under any claim ending by 30 June 2020. There is not however, a maximum number of employees an employer can claim for from 1 November 2020.
Wage Grants: Until January 2021, employers can claim 80% of their employees’ wages, up to a maximum of £2,500.00 per month (or £576.92 a week), from the date on which they commence a period of furlough leave. The Government intends to review this in January 2021 and will consider whether economic circumstances are improving such that employers may be asked to contribute to employee wages. Employers can presently choose to top up their employees’ wages, but are not obliged to do so. Employers must however, pay National Insurance Contributions (NICs) and pension contributions for employees who are furloughed. Employers must report such payments of NICs and pension contributions via a Full Payment Submission (FPS) to HMRC on or before the pay date.
Shielding Employees: Employers can (but are not obliged to) furlough employees who are unable to work because they:
- Unable to work from home and are shielding in line with Public Health England guidance (employees who live with someone who is clinically extremely vulnerable can still attend work if they cannot work from home); or
- have caring responsibilities as a result of coronavirus, for example, employees who need to look after children.
Sickness Absence: The scheme is not intended to subsidise wages for short-term sickness absence however, if the needs of the business prevail and the employee is already on sick leave, employers may furlough employees where eligible. Furloughed employees who become unwell, due to coronavirus or otherwise, must be paid at least Statutory Sick Pay (SSP). Employers can decide whether to keep the employee on furlough (at furlough rate) or move them across to SSP.
Duration of Furlough: As before, the employee must not carry out work for their employer that makes money or provides services during furloughed hours. Employees can however:
- take part in training in connection with their job duties (although they must be paid at least the National Minimum Wage for the hours spent training);
- volunteer for another employer/organisation; or
- work for another employer (if employment contract permits).
Employee Rights: As before, employees will retain their rights at work, including:
- Annual leave;
- Maternity and other parental rights;
- Rights against unfair dismissal;
- Redundancy payments (which cannot be claimed for under the CJRS); and
- The right to be paid at least the National Minimum Wage for any hours worked.
Annual Leave: Furloughed employees must continue to accrue annual leave in accordance with their employment contract. The employer and employee can agree to vary annual leave entitlement as part of the furlough agreement however, where the employee is only entitled to the statutory minimum annual leave entitlement (28 days, inclusive of bank and/or public holidays for a person working a five day week), annual leave must not be varied as such a reduction would fall below the statutory minimum. Employees must be paid at their full rate of pay whilst on holiday (ie: the employer must top up the employees’ wages) and must not be placed on furlough simply because they are on holiday for such period. Any bank and/or public holidays (ie: Christmas Day, Boxing Day and New Year’s Day) must also be paid at full rate of pay.
Furlough Agreements: In order to be eligible under the scheme, employers must have confirmed to their employee that they have been furloughed or flexibly furloughed in writing. Written agreements should be discussed and drawn up in advance of any period of furlough, save for between 1 November and 13 November 2020 when the Government will allow retrospective agreements, so long as they conform with Employment Law. Retrospective agreements dating back to 1 November 2020 must therefore be in place by Friday, 13 November 2020.
Claim Periods: Claim periods must start and end within the same month. Where claim periods overlap, the employer will need to submit two separate claims. Employers must report and claim for a minimum of seven consecutive calendar days. Claims in connection with November 2020 must be submitted by 14 December 2020. Thereafter, subsequent months will follow the same pattern with the final claims for March 2021 being made on 14 April 2021.
Public Information: With effect from December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships (LLPs), including the company registration number, for those who have made claims under the scheme for the month of December onwards.
Notice Periods: Employers can continue to claim under the CJRS for employees who are serving statutory notice periods. The CJRS must not however, be used to substitute redundancy payments. The Government is reviewing whether employers will continue to be eligible to claim notice periods under the CJRS and may change its approach for claim periods starting on or after 1 December 2020. Further guidance is expected in late November 2020.
Maternity Leave: Where the employer and employee agree to end an employee’s maternity leave early to enable them to be furloughed, they must give at least eight weeks’ notice of their return and employers will not be able to furlough them until the end of the eight weeks.
Calculations: For more information on how to calculate the figures to be submitted in connection with a CJRS claim or to check how much you can claim, click here. The previous reference period for calculating an employee’s ‘usual wages’ remains unchanged.
Job Support Scheme (JSS): The JSS, scheduled to commence on 1 November 2020, has been withdrawn and postponed until further notice.
Job Retention Bonus (JRB): The JRB, scheduled to be paid in February 2021, has been postponed and will be re-deployed at an appropriate time. The JRB was intended to encourage employers to keep employees in work until the end of January 2021 however, due to the extension of the CJRS, the policy intent no longer applies.
Further information regarding the CJRS scheme can be found here.