The Chancellor gave further details on the Coronavirus Job Retention Scheme (CJRS) extension on 5 November 2020. This will be welcomed by many businesses, however, for some it will have come too late with redundancies having already been made. It also raises the question of further lockdowns, but lets not go there!!
Have you been approached to rehire someone you made redundant? Are you thinking about furloughing employees you haven’t done before?
Here is what we know on the extended CJRS:
- The CJRS is extending to the end of March 2021 and will continue to be flexible.
- The government have confirmed that they will pay 80% or up to £2,500 of an employee’s salary, with the employer paying NICs and pension contributions up to January 2021.
- There will be a review of the scheme in January to assess whether employers will be in a position to make contributions.
- The Job Support Scheme (JSS) has been postponed and the Job Retention Bonus (JRB) that was due to be paid in February will no longer happen. The Chancellor has said that the JRB will be “redeployed at the appropriate time”. This has been criticised by many businesses who were relying on this money coming in.
- Those who were not furloughed previously will have to be on the employers PAYE payroll on 30.10.2020.
- Those who were furloughed before, the calculations for pay will remain the same as before.
- Those who haven’t been furloughed before will have alternative calculations and guidance on this will be published on 10 November 2020. However, the government have published the following:
If an employee was not previously eligible for CJRS, 80% of wages must be calculated for employees:
- on a fixed salary – 80% of the wages payable in the last pay period ending on or before 30 October 2020
- whose pay varies – 80% of the average payable between (these dates are inclusive) the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins.
- Employees who cannot attend work due to shielding under Public Health guidance or have caring responsibilities can be furloughed. However, employers are not obliged to furlough these employees.
- Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. Employers are not obliged to re-hire and there are significant implications for employers if they do.
- As before, every employee who is furloughed must have a written agreement with their employer and for this agreement and records of hours furloughed to be kept for 6 years.
We understand that many of you will have questions and we would advise that you contact us today to discuss your particular situation!