On Saturday 31 October Prime Minister Boris Johnson announced that the Coronavirus Job Retention Scheme (Furlough) will be extended.
Further announcements are expected soon which will hopefully give further clarity including guidance regarding issues such as holidays and notice periods during furlough. The information below is what we are currently aware of from what has been officially released and are able to share with you:
- To avoid having two schemes running simultaneously, the Job Support Scheme (JSS) which was due to start on the 1st November has been delayed. JSS will now launch when the new furlough extension ends.
- The extended furlough scheme will continue “until December”. The precise end date is unclear, but the English lockdown restrictions look set to be in place until 2 December. The government will pay up to 80% of an employee’s normal pay, capped at £2,500 and employers will be responsible for NICs and pension contributions.
- In relation to the furlough scheme, over the last three months the government contribution has been reducing whilst the employer contribution has been increasing. However, the extended furlough scheme will put the clock back to how things were in August, when the government contribution was 80% of wages up to a cap of £2,500 and employers just paid employer NICs and pension contributions.
- Flexi-furlough will continue to be an option, so employees can work part-time and receive a furlough grant for unworked hours.
- The government has widened the furlough scheme so that, to be eligible to be claimed for under this extension, employees must simply have been on an employer’s PAYE payroll before midnight on 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.
This will come as particularly welcome news for those employees who have never qualified for furlough but who would have been eligible for JSS, including recent new starters.
Many businesses have already put in place JSS Agreements in anticipation of the scheme’s launch on Sunday 1 November. Those businesses should contact affected employees as soon as possible to explain that the government has made a last-minute decision to extend the furlough scheme and you will be asking them to agree to continue on furlough/be placed them on furlough and you will be contacting them as soon as possible with further details.
We will also endeavour to keep you up to date with any further announcements and the impact this may have on businesses and their employees.
If you want to make sure you’re up to date, or need further clarity, please do not hesitate to contact the Alcumus PSM HR team for assistance via email [email protected] or call us on 01484 439930.