Coronavirus Job Retention Scheme – UPDATED 25.11.20

25 November 2020


On 5 November 2020, the Chancellor announced that the Furlough Scheme/Coronavirus Job Retention Scheme (CJRS) would be extended to 31 March 2021. Prior to that announcement, the CJRS had been due to end on 30 November 2020 and a Job Support Scheme (JSS) was going to be implemented instead. The JSS is now out of the picture.

From 1 November 2020 the CJRS will provide 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. (This was the level paid during August 2020.) The employer contribution will be reviewed in January 2021.

As a reminder:

  • Employers can claim even if they did not utilise the CJRS previously.
  • Employers have to pay employees’ (i) national insurance contributions and (ii) pension contributions.
  • An employer can choose to enhance the employee’s earnings over and above the (capped) government contribution.
  • Key dates: (I) Employers can claim for employees who were employed on 30 October 2020 – provided the employer has made a PAYE Real Time Information submission to HMRC between 20 March 2020 and 30 October 2020 notifying a payment of earnings for the specific employee. (II) Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and claimed for. (III) Employers can agree retrospectively to furlough an employee with effect from 1 November 2020, so long as the agreement to retrospectively claim furlough occurs on or before this Friday, 13 November.
  • For claim periods starting on or after 1 December 2020, an employer cannot claim for any days on or after 1 December 2020 during which the employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation).
  • Furlough claims need to be submitted within two weeks of the end of the previous calendar month unless there is a “reasonable excuse for failing to make a claim in time”. E.g. by 14 December 2020 for November 2020; by 14 January 2021 for December 2020; etc.
  • Flexible furlough is still possible i.e. the employee can work part-time and be furloughed part-time.
  • Placing an employee on furlough/the CJRS is at the employer’s discretion.
  • The Employer and Employee must have agreed in writing that the employee will cease all work during furlough days/weeks – although note the option for flexible furlough – and agreed any reduction in salary. This written agreement can take the form of an email exchange. The written record must be kept for at least 5 years.
  • Grants cannot be used to fund redundancy payments.
  • The Job Retention Bonus will no longer be paid in February 2021, as the CJRS will be available at that time. The government indicated that an alternative retention incentive will be put in place at the appropriate time.
  • The CJRS applies to “PAYE employees” and includes: (I) office holders (including Company directors), (II) salaried members of LLPs, (III) agency workers (including those employed by umbrella companies), (IV) limb (b) workers, and (V) apprentices (who may continue to undertake training if they are furloughed).
  • Employees on fixed term contracts can be furloughed. The CJRS also permits those contracts to be extended and for furlough to apply. However, the extension must be agreed during the (initial) term (although query whether they could just be re-employed as is the case with permanent employees).
  • An employee cannot carry out any work for the employer during the furlough period/days (although note the option of flexible furlough). However, they are able to undertake training and do volunteer work, provided they do not provide services to or make any money for their employer during furlough. They are also able to take paid employment with another employer whilst furloughed with the first employer (subject to any contractual restraints/consent).
  • Furloughed workers will continue to accrue holiday entitlement during the furlough period.
  • Employees who are furloughed may take annual leave during the furlough period; they will need to be paid 100% of normal pay (i.e. it will need to be topped up by the employer if the employer is paying 80% during the furlough period).
  • Shielding employees (or employees looking after someone who is shielding/highly vulernable) can – but, naturally, do not have to be – placed on furlough.
  • Maternity leave returners need to give the statutory eight weeks’ notice to end maternity leave early in order to be furloughed and therefore get furlough pay (which is often higher than the statutory SMP rate).

If you have any questions concerning the CJRS and any of the matters newly outlined then please contact us here or via your usual Kervin & Barnes’ contact.