What’s available through the extended Coronavirus Job Retention Scheme?
The extended Coronavirus Job Retention Scheme allows employers to furlough a staff member and claim 80 per cent of the employee’s salary up to £2,500 per month.
The scheme is open to businesses that cannot sustain their workforces because they have been impacted by the coronavirus.
The Coronavirus Job Retention Scheme previously required employers to contribute a share of the 80 per cent of salary employees receive while they are not working, with the government paying the remainder. This is no longer the case, with the grant covering the entire amount.
However, employers are liable for employer National Insurance contributions and pension costs.
Employers can still top up employees’ wages above the minimum 80 per cent furlough pay amount but do not have to.
When does the Coronavirus Job Retention Scheme end?
Following the announcement of renewed restrictions on businesses across the UK from 5 November, the Job Retention Scheme has been extended to 31 March 2021.
This postpones the introduction of the previously announced Job Support Scheme until at least 1 April 2021.
The government will review the Coronavirus Job Retention Scheme in January to decide whether economic circumstances have improved enough to ask employers to contribute more; keeping employees on furlough may become more expensive after this point.
How much notice do I need to give employees to bring them back from furlough?
Employees need to be available to return to work at any time, but you should give reasonable notice where possible.
The requirement to return to work should be confirmed by letter or email.
What communication do we need to have with workers coming back from furlough?
The requirement to return to work should be confirmed by letter or email. Any changes to the terms and conditions of employment (eg. hours or pay) must be set out in writing, with the employee also confirming their acceptance in writing.
Speaking directly with employees prior to them returning to work provides an opportunity to discuss any issues or concerns, such as childcare commitments or health worries.
“It’s a good management practice. All employers have a duty of care for their employees, whether they’re physically returning to the workplace or working from home,” said Jill Bottomley, director of HR Dept Trafford and Warrington.
“Employees who were shielding are now able to go back to work, but a number will have concerns about doing so. Risk assessments will need to be carried out to safeguard their health and minimise the risk of infection.”
You also need to make employees aware of any proposed changes to their working environment.
“You may need to consult staff about changing their start or finish times if there’s a physical return to the workplace. That way, people don’t arrive at the same time. It’s down to the most basic things, but they are important. Consultation with employees may also be needed where there’s proposed organisational changes and restructures,” Jill said.
What considerations am I required to give employees that don’t want to come back from furlough?
Employees don’t have a right to remain on furlough and the employer can ask the employee to return to their job.
“It is important to find out what the reasons are for the individual not wanting to come back from furlough on a ‘can’t do’ or ‘won’t do’ basis,” said Jill Bottomley, director of HR Dept Trafford & Warrington.
If an employee says they can’t come back to work it needs to be managed on a case-by-case basis. For example, an employee may be signed off from work by their GP.
If there’s no reasonable reason for an employee not returning to work then this may lead to disciplinary action.
Advice should be sought before considering any form of disciplinary action or agreeing to periods of unpaid leave.
You can read the government’s guide to Statutory Sick Pay and the Chartered Institute of Personnel and Development had detailed guidance on absence measurement and management.
What happens if people want to keep working from home?
If people are going to work from home, employers need to ensure that they have a safe working environment.
“There are a number of legal obligations employers have in terms of creating a safe place to work. For example, display screen equipment and assessments of desks. Failure to ensure safe working could result in personal injury claims against the employer for things like bad necks,” said Jill Bottomley, director of HR Dept Trafford & Warrington.
The Health and Safety Executive provides guidance on working safely with display screen equipment and creating a safe place of work.
Can we use the furlough scheme for the first time now?
From 1 November 2020, employees do not need to have used the Coronavirus Job Retention Scheme previously to use it now.
Employers need to have created and started a PAYE payroll scheme on or before 30 October 2020 to make a claim.
Different rules may apply if you’re bringing someone back from redundancy. You can find more guidance on who can claim on the government’s website.
When do employees have to be on payroll to qualify for furlough?
Employees have to be on your PAYE payroll on 30 October 2020 in order to use the Job Retention Scheme.
The employer must have made a PAYE Real Time Information submission to HMRC between 20 March 2020 and 30 October 2020 to qualify for the Coronavirus Job Retention Scheme.
What if employees have been furloughed in the past?
If an employee was previously furloughed, employers must use the same calculations for calculating reference pay and usual hours.
Can we bring people back who have been made redundant to furlough them?
Employees that were employed and on the payroll on 23 September 2020 who were then made redundant can be re-employed and claimed for.
The Coronavirus Job Retention Scheme grant is paid in arrears, so there are cash flow implications of bringing workers back from redundancy to put them on furlough. However, the government expects grants payments to be made six working days after the first claims.
What happened to the Job Support Scheme and can we still access it?
The announcement of the extension of the Coronavirus Job Support Scheme means the Job Support Scheme has been postponed until at least 1 April 2021.
What financial planning should we be doing?
Understanding the demand for your product or service and the financial resources available is essential to making decisions about your workforce.
“The main thing is forecasting and resource planning, that’s the starting point,” said Paul Bulpitt, co-founder of accountancy firm The Wow Company. “It doesn’t need to be a three-way cash flow forecast, but a slightly extended time horizon than this month and next month.”
Paul advised business leaders to think about what their business might look like over the next six to 12 months.
You can read Be the Business’s guide to managing your cash flow during coronavirus to learn more about the topic.
Have the rules of the Coronavirus Job Retention Scheme changed?
The extended Coronavirus Job Retention Scheme will operate largely as the previous scheme did.
Here are the key differences:
- Employers do not have to contribute to the 80 per cent salary payments that an employee receives
- HMRC will publish details of employers who make claims under the extended CJRS scheme starting from December
- From 1 December, furlough cannot count towards employees’ notice periods
- The period during which you can claim has been updated (see below)
|Claim for furlough days in
||Claim must be submitted by
||14 December 2020
||14 January 2021
||15 February 2021
||15 March 2021
||14 April 2021
How do we make a claim under the extended Coronavirus Job Retention Scheme?
You can make a claim using your Government Gateway account. The government has published guidance on calculating how much you can claim and making a claim.
If you have an agent, such as an accountant, that’s authorised to do PAYE online then they will be able to claim on your behalf.
What is flexible furlough and how can it help with workforce planning?
Employers have been able to flexible furlough employees since 1 July 2020. This means you can place employees on furlough for part of their normal working hours.
For example, reduced demand may cause a manufacturer to stop production from Monday to Wednesday. Employees can be on furlough during this time and still work on Thursdays and Fridays as normal.
The extended furlough scheme has the same provisions for flexible furlough.
What can workers do while on furlough?
During the time that an employee is furloughed, the government guidance prohibits them from doing anything that:
- Makes money for your organisation or any organisation linked or associated with your organisation
- Provides services for your organisation or any organisation linked or associated with your organisation
Employees are able to undertake training, which provides an opportunity to keep people engaged (read case studies of what organisations are doing to support furloughed staff).