As we are near the end of 2020, COVID 19 is still making its effects felt with many countries, including the UK which is battling a second wave of the pandemic. Whilst a vaccine may be on the horizon, many governments have extended various schemes to retain jobs and support businesses.
In the UK, it was initially announced that the new Job Support Scheme (JSS) would replace the CJRS (Coronavirus Job Retention Scheme) as of 1 November 2020. The end of October was accompanied by the UK government’s decision to extend the CJRS by a month. Days after, the CJRS was further extended until 31st March 2021.
This extension of the CJRS has reverted back to rules seen in August with some of the key points being:
- Employers are able to furlough employees who have not been previously furloughed.
- Employees will receive 80% of their usual salary for furloughed hours that are not worked, capped at £2,500 gross per month until January 2021.
- The £2,500 gross cap is proportional to the hours not worked.
- The minimum period of furlough (and claim to HMRC) must be 7 consecutive calendar days. Therefore, employers are technically able to ‘rotate’ furlough between employees.
- Employees that the employers are claiming for, must be employed and on the employer’s PAYE payroll on 30 October 2020 and an RTI submission for them for payment of earnings must have been made to HMRC between 20 March 2020 and 30 October 2020.
- Employers will be required to cover the NI and employers’ pension contributions – the same as it was in August 2020.
- The CJRS will be reviewed in January 2021 by the government to decide whether employers should contribute more.
- Employers will be required to calculate and pay furloughed employees in the first instance and claim this back in arrears from HMRC in the form of a grant.
As before, employers must inform the employees that they are placed on furlough in writing. To minimise risks, employers should seek explicit consent from the employee via an agreement as this constitutes as a change of terms and conditions and reduction in pay.
What about the JSS? This has now been postponed and note that the Job Retention Bonus (JRB) will not be paid in February 2021.
Given the rapid changes seen recently, this article and information is accurate at the time of writing and may change as the situation develops.
If you have any queries or would like to know more, please contact us at IRIS HR Consulting.