The Job Retention Scheme has been extended
The Government has announced that the Job Retention Scheme (JRS) will be extended until March 2021.
The JRS began in March 2020 and involves designating some or all employees as ‘furloughed workers’. This means temporarily changing an employee’s status of employment so that they do no work at all, or work for fewer hours than normal, but are retained by their employer. It is an alternative to making employees redundant which may otherwise be required due to having no, or little, work to offer the current workforce.
The JRS was scheduled to come to an end on 31 October 2020 but has now been extended for all UK nations. This means that the Job Support Scheme, which was meant to begin on 1 November, will no longer be coming into force until further notice, if at all. The extended JRS will return its original structure of covering 80% of furloughed employees’ wages for any unworked hours within an employee’s usual working hours, to a maximum of £2,500 per employee per month. This level of grant will be reviewed at the end of January 2021, meaning grant levels may change.
Full and flexible furlough will both still be running within the JRS. When an employee is on full furlough, no wage contribution is needed from the employer except for National Insurance and pension contributions. Flexible furlough rules mean that employers pay staff for the hours they work and can claim 80% of wage costs for unworked hours to a maximum which is proportionately reduced in accordance with the number of unworked hours.
Both employers and employees must be eligible for the scheme for claims to be successful. All employers with a UK bank account and UK PAYE schemes can claim the grant whether their business is open or closed due to lockdown restrictions of any kind. However, the Government expects that publicly funded organisations will not use the JRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. The same rules have applied to use of the JRS since it began.
Importantly, employers do not need to have used furlough before in order to use the extended scheme and, similarly, employees do not have to have been furloughed before to also be eligible. For employees to be eligible to have their wages claimed for under this extension, they must be on an employer’s PAYE payroll by 23:59 on 30 October 2020. This means that a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.
On 10 November 2020, further guidance was released on how employers can use the scheme, until at least January 2021. The Government has confirmed that employers cannot make claims on or after 1 December 2020 for employees who are serving a contractual or statutory notice period (this includes people serving notice of retirement, dismissal, or resignation). If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, employers will need to make an adjustment to ensure that they are not overclaiming.
It is essential that employers familiarise themselves with this guidance as much as possible and regularly check it for updates.