**Updated 20 November** Following the extension of the Job Retention Scheme (JRS) until 31 March 2021, the Government has published further guidance on how the scheme will operate.
Overview of the extended JRS
As with the original JRS, employers can claim 80% of an employee’s usual salary for unworked hours up to a maximum of £2,500 per month. Employers can either fully furlough an employee, in which case they cannot undertake any work during that period, or flexibly furlough an employee, meaning the employee can work any amount of time and any work pattern, provided they do not work any hours which are recorded as furloughed. Employers can elect to top up their employee’s wages under the extended scheme.
During the hours on furlough, employees must not undertake any work for their employer, but may participate in training and can volunteer or work for another employer or organisation, if this is permitted under their employment contract.
Employers must continue to deduct tax and NI contributions, and pay employer NI contributions, on the full amount they pay their employees, including any scheme grant.
Holiday will continue to accrue in accordance with an employee’s employment contract. Employees can take holiday while on furlough, but any holiday taken by an employee on flexible furlough should be counted as furloughed hours rather than working hours.
If a furloughed employee takes holiday, their employer must pay them their usual holiday pay.
Employers should note that claims cannot be made in respect of notice periods after 30 November 2020.
Who can claim?
All employers with a UK bank account and UK PAYE schemes can claim under the extended JRS. There is no requirement to have previously claimed prior to the 30 October 2020 to be eligible to claim from 1 November 2020.
Employers can claim for employees on any type of contract, including full-time, part-time, flexible or zero-hour contracts. To claim from 1 November 2020, the employee must have been employed and on payroll on 30 October 2020 and there is no limit on the number of employees that can be furloughed from 1 November, which represents a significant change in the previous position.
Other requirements and considerations
Any employer considering claiming under the extended JRS will need to discuss and agree in writing with the employee any changes to their employment contract. The agreement must be consistent with all employment, equality and discrimination laws and a written record should be kept for 5 years. Employers must also keep records of how many hours their furloughed employees work, and the number of hours furloughed (i.e. not worked).
Employers are able to place their employees on furlough retrospectively with effect from the 1 November 2020, but this will only be valid if the agreement is put in place up to and including the 13 November 2020.
Any employees that have been made redundant, or stopped working for their employer on or after 23 September 2020, can be re-engaged and placed on furlough, provided the employee was employed with the employer on 23 September 2020 and a PAYE RTI submission was made to HMRC between 20 March 2020 and 30 October 2020.
It is also worth noting that from December 2020, HMRC will make public employer names and company registration numbers of those who have made claims under the scheme. This may be critical for some businesses that do not wish their use of the JRS to be public knowledge.
The last day for submitting or changing claims for periods ending on or before 31 October 2020 is 30 November 2020. Any claims in November 2020, December 2020 and January 2021 must be submitted by 14 December 2020, 14 January 2021 and 15 February 2021 respectively.
The Government have confirmed that the level of support offered under the JRS will be reviewed in January 2021.
If you have any questions about the extended furlough scheme, or need help with your written agreements, please do get in contact with me at [email protected].