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Coronavirus Job Retention Scheme Extension - What This Means for Employers

on Monday, 02 November 2020.

Following news that a second national lockdown is to be imposed in England from 5 November until 2 December 2020 (subject to a successful vote in the House of Commons) the Government has announced an extension to the furlough scheme.

Who Does the Extended Furlough Scheme Apply to?

Both employees that have been furloughed previously, and those that have not, are eligible as long as the employee was on the employer's PAYE payroll by 23:59 on 30 October 2020. The employee can be furloughed on a full-time or flexible basis.

What Can the Employer Claim?

The scheme applies to all employers with a UK bank account and UK PAYE schemes. The scheme is not considered to apply to publicly funded organisations but in some circumstances may apply to partially publicly funded bodies.

The Government will pay 80% of wages up to a cap of £2,500 for the time the employee is not working. The grant for which the employer is eligible is calculated against the hours normally worked by the employee.

As a minimum to qualify for the grant the claim must be for a minimum of the hours not worked during seven consecutive calendar days.  

It is for the employer's discretion as to whether they decide to top up the employee's wages above the 80% out of their own funds.

Coronavirus guidance employers

What Is Due to the Employee?

The 80% covered by the scheme needs to be paid to the employee in full, with employers paying National Insurance and pension contributions, and the employer must continue to pay the employee for hours worked as normal. 

How Long Will the Extended Furlough Scheme Run?

The scheme is set to run until December although the specifics are still being finalised and this includes the method for making a claim.

What Does This Mean for Employees Who Are Considered Clinically Vulnerable?

Those at higher risk from coronavirus (COVID-19) have been divided into two groups, those who are clinically vulnerable and those who are clinically extremely vulnerable. We await further guidance but what we know currently is that shielding has not been re-introduced. Instead, the Prime Minister suggested those who are clinically extremely vulnerable should take extra precautions which includes limited contact with others and working from home. He also stated that if working from home is not possible, a clinically extremely vulnerable employee should not go into work. Employers will need to consider any detailed guidance when it is available, an employee's particular circumstances and the nature of the particular workplace (including the anti-COVID measures that have been implemented to date).

Will It Be Necessary to Obtain Written Agreement from Employees Being Furloughed Under the Extended Scheme?

Most employers will have some form of written confirmation or agreement for employees who were furloughed under the original CJRS scheme. Whilst the terms of that correspondence will need to be reviewed, it is likely that further written confirmation or agreement will be required with employees being placed on extended furlough. 

Our specialist Employment Law team is able to assist with any queries you may have about the extended scheme. If you do not have a point of contact within the team already, please contact Michael Halsey on 07554 432 829 in the first instance, or complete the form below.

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