The Chancellor has announced that the Coronavirus Job Retention Scheme will be extended until March 2021. The conspiracy theorists amongst us wonder why so long when the lockdown is only for November?
However, this is a good thing for employers and employees because it means that they can continue to use the flexible furlough scheme paying 80% of their current salary for hours not worked at least until January 2021. This is up to a maximum of £2,500 per month. In January 2021 the Government have confirmed they will review the scheme and decide whether at that point employers should be asked to contribute more to their employees’ payments.
You do not have to have used the CJRS previously and you can claim whether or not your business is closed. Full Details and Guidance is expected to be published on 10th November by HMRC as to how to claim under the extended scheme.
In order to be eligible employees have to have been on the payroll as at 30.10.2020 and so a real time PAYE submission has to have been made between 20.03.2020 and 30.10.2020 for the employee. The scheme is very flexible and so can be used for any amount of time or shift pattern and employees can be on any type of employment contract. Employees do not have to have been previously furloughed but there are different pay reference periods for those that were and those that were not so make sure you apply the correct rules.
For hours not worked employers have to contribute employer national insurance and employer pension contributions and can claim for the 80% wages up to a maximum of £2,500 per month. The employer can choose to top up the employees’ wages to 100% but does not have to. For hours worked the employer has to pay the employee in line with their contracts of employment as normal.
For help with any employment matter contact the Employment Law Team on 01384 811 811.