A. The job retention scheme that began in March will be extended until March 2021.
The scheme means temporarily changing employees’ status of employment so they do no work at all, or work for fewer hours than normal, but are retained by the employer.
The JRS was due to end on October 31 2020, but it will now be extended for all UK nations.
This means the job support scheme, which was meant to begin on November 1, will no longer be coming into force until further notice, if at all.
The extended JRS will return to its original structure of covering 80 per cent 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, and 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 employers pay staff for the hours they work and can claim 80 per cent of wage costs for unworked hours to a maximum that is proportionately reduced in accordance with the number of unworked hours.
In both cases, employers can choose to top up pay to the amount the employee would normally receive.
Employers and employees must both be eligible for claims to be successful. All employers with a UK bank account and UK pay-as-you-earn scheme can claim the grant whether their business is open or closed due to Covid restrictions.
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.
Employers do not need to have used furlough before to use the extended scheme and, similarly, employees do not need to have been furloughed before to be eligible.
For employees to be eligible to have their wages claimed for, under this extension, they must have been on an employer’s PAYE payroll by 23:59 on October 30 2020.
This means a Real Time Information submission notifying payment for that employee to HM Revenue & Customs must have been made between March 20 2020 and October 30 2020.
Despite the increase in flexibility the extended scheme provides when compared with its original incarnation, further restrictions on its usage that we have not seen before have been introduced, which are likely to keep its ongoing cost down.
The government has confirmed that the same rules on annual leave apply to the extension as it did during the original scheme, including the requirement to top up pay.
Another central point to consider is that employers can also furlough employees transferred under transfer of undertakings (protection of employment) or PAYE business succession rules subject to certain conditions.
Furthermore, if any employees decide to end maternity leave early, so they can be furloughed, they must give their employer at least eight weeks’ notice of their return to work, meaning their employer will not be able to furlough them until the end of the eight week period. However, this notice period can be shorter in certain circumstances.
Notably, in a significant change to the previous position, the government has confirmed that from December 1, those serving their statutory or contractual notice periods, including if they have retired, cannot be claimed for under the extended JRS.
Peter Done is managing director of Peninsula
