The Coronavirus job retention scheme is being extended until 31 March 2021 and whilst the fundamentals of the scheme remain the same, allowing employers to claim 80% of an employee’s salary up to £2,500 per month, there are some changes that both employees and employers should know.
As before, employers must gain the employee’s consent before furloughing and the employee must not continue to work, however they are able to continue studying, training, and volunteering whilst being furloughed. The position regarding annual leave remains the same, and employers must pay this based on full pay. Further any employee wanting to return from maternity leave to furlough must still provide 8 weeks’ notice to do this, although the new guidance suggests in some circumstances this period could be shorter. The scheme is not an alternative to redundancy and therefore employers are still entitled to make redundancies even though furlough will be available until March 2021.
The scheme rules differ depending on the period for which furlough is being claimed.
Before 1 November 2020
- If you are claiming for a period that ends on or before 31 October 2020, you can only do so if you have previously made a claim for furlough for a minimum of three consecutive weeks between 1 March 2020 and 30 June 2020. The claim for this period must have been submitted by 31 July 2020.
- The deadline for submitting claims up to and including 31 October 2020 is 30 November 2020.
- The exception to this is if you are making a claim for employees who have returned from statutory parental leave after 10 June 2020, and military reservists returning from a period of mobilization ending after 10 June 2020. Employers in this instance are entitled to claim furlough even if they are doing so for the first time, provided that they have done the above for any other employee in the organisation, the employee they wish to furlough for the first time started parental leave before 10 June 2020, has returned from that leave after 10 June 2020 and the employee was on an employer’s PAYE payroll on or before 19 March 2020. The same principles apply to military reservists.
- The salary cap of £2,500 applies per job, and any employee who has multiple jobs is entitled to be furloughed from one or all their jobs and receive 80% of their earnings for each.
From 1 November 2020 onwards
- Any employee is eligible if they were employed on 30 October 2020 and their employer has made a PAYE Real Time Information submission to HMRC between 20 March 2020 and 30 October 2020. This will be reviewed again in January 2021.
- You do not need to have claimed furlough for an employee prior to 1 November 2020 for them to be eligible.
- The salary cap of £2,500 previously applied to each employer individually when claiming periods of furlough up to 31 October 2020 where an employee has more than one employer. However, the new guidance suggests that this is not the same if claiming for periods from 1 November onwards although it does not explicitly confirm.
- For claim periods relating to November, employers can continue to claim furlough for employees even if they are serving their statutory notice period. It remains the case, that furlough cannot be used to substitute a statutory redundancy payment if the employee’s employment is terminating via redundancy. This changes for claim periods on or after 1 December 2020, and employers cannot claim furlough for any employee serving a contractual or statutory notice period, regardless of the reason for termination. Employers must therefore pay this themselves, and any notice or statutory redundancy payment must be calculated based on an employer’s normal wage rather than a reduced furlough wage.
- Employers can re-employ and claim furlough for any employee made redundant on or after 23 September 2020.
- The claim window for November is shorter than previous periods, and therefore any claim for Furlough in November must be made by 14 December 2020. Subsequent claims for following months must follow the same pattern and be submitted on the 14th day of each month.
In summary not a lot has changed, although the new rules do appear to bring some flexibility to allow employers to furlough members of staff from 1 November onwards who have not previously been furloughed and to offer flexible furlough from the start. However, it also places new obligations on employers to pay any periods of notice themselves and confirms an employee’s rights that any notice is calculated based on their full pay. The rules as writ, however, are far from final and continue to change and adapt as further guidance is brought out. Accordingly, employers should make sure they regularly refresh themselves on the most recent position regarding the same.
The Employment Department at Lyons Davidson deals with claims for both Employees and Employers and can advise further on the most recent guidance regarding the CJRS. If you require further information then please contact David Leslie, Partner or Michael Tait, Senior Associate.