Furlough Scheme Extended to March 2021

Year Published: 2020

On 31st October 2020, the Government announced that, despite localised tier systems being in place, new COVID-19 cases were on the rise again and therefore new national lockdown restrictions (‘Lockdown 2’) would be put in place starting from 5th November 2020 and ending on 2nd December 2020. As a result, the Coronavirus Job Retention Scheme (CJRS) – aka the ‘Furlough’ scheme – would be extended until 2nd December. However, a further announcement was made stating that the CJRS would now run until the end of March 2021 as a way of providing support for a long enough period to help businesses recover and get back on their feet.

As set out previously within the scheme, employees will receive 80% of their pay for hours not worked (up to a maximum of £2,500), with employers just paying the National Insurance and Pension contributions. This will then be reviewed in January 2021 to ascertain whether the employer contributions should be increased at that point.

Eligibility

There is also no requirement for the employee or the employer to have registered with the CJRS previously, which may be a help for businesses who may not have needed to furlough staff during the previous 6 months, but will need to do so during the next 4 months. However, employees do need to have been on the employer’s payroll by 23:59 on 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to the HMRC must have been made on or before 30th October 2020.

Job Retention Bonus Withdrawn

On the back of extending the CJRS, the Government also announced that the Job Retention Bonus (JRB) – a one-off payment of £1,000 for employers for each employee who was placed on the furlough scheme – will not be paid in February. The JRB was intended as an incentive to keep staff continuously employed until the end of January, however with the extension of the CJRS until end of March, this incentive is no longer required. The Government have indicated that they may consider a further incentive scheme at a more appropriate time.

No details have been provided yet as to when the Job Support Scheme (JSS) may be put in place, whether that be at the end of March 2021 or indeed at all. Further guidance on this will be provided once the Government provide relevant clarification.

For further advice on the furlough scheme, new measures in place for Lockdown 2, or for any Employment related matters, please contact Katie Hodson, Partner and Head of Employment, on 0161 475 7670 or email [email protected].

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