Google Adwords 0808 278 1398 Bing Ads 0808 274 4482

*Important update* on furlough extension scheme to March 2021

Further to the Government’s announcement on the 5th November that there would be an extension to the Coronavirus Job Retention Scheme until 31 March 2021, guidance has now been issued on the continued operation of the scheme.

We have outlined below, the key factors to note if you are either continuing to furlough your employees after 31 October 2020 or are considering furloughing employees for the first time from 1 November 2020.

Who is eligible during the extension period?

  • For periods from 1 November 2020 onwards, employers can claim under the scheme for employees who were employed on 30 October 2020, as long as they made a Pay As You Earn Real Time Information submission to HM Revenue & Customs between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
  • Employees who were made redundant or whose employment terminated on or after 23 September 2020 can be re-employed and furloughed.  This is provided that they were employed and on the payroll on 23 September 2020 and a RTI submission must have been made in respect of employees on or before this date.

It is important to note that an employee does not have to have been previously furloughed and employers do not need to have used the scheme previously. Employers across the UK can claim whether their businesses are open or closed.

How much can be claimed?

Until 31 January 2021, the government will pay 80% of wages up to a cap of £2,500 for the hours not worked and employers will pay employer national insurance contributions and pension contributions for furloughed employees’ pay. (The cap is proportional to the hours not worked).

Employers are still able to choose whether they wish to top up employee wages above the scheme grant at their own expense.

What about flexible furlough?

Flexible furlough is will continue to be an option – employees will be able to work part time and receive a furlough grant in respect of unworked hours.

*Key update* | Contractual and statutory notice periods

The government has confirmed that for claim periods starting on or after 1 December 2020, employers cannot claim for any days on or after 1 December 2020 during which furloughed employees were serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation). If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, employers are required to make an adjustment. The guidance also states that for periods relating to November 2020, claims can be made for furloughed employees who are serving statutory notice periods.

This is a significant issue for any employers who are considering dismissing or making redundant furloughed staff in the near future, as, to be able to make claims in respect of the notice periods for such staff, the employees will need to be given notice before 1 December 2020 – meaning that any required redundancy consultation would need to start as soon as possible.

Job Retention Bonus:  The job retention bonus will not now be paid in February.  The government has stated that “a retention incentive will be deployed at the appropriate time”.

Changes at the end of January 2021:  The government will review the policy in January to decide whether economic circumstances are improving enough for employers to contribute more.  The 80% government contribution may well not last for the duration of the extension.

We are here to help…

In light of this updated guidance, it is essential any redundancy consultation is started as soon as possible.  Our employment law specialist, Lisa Aitken is available to offer legal and HR support.  Fixed fee packages are also available so please call Lisa on 07960 469988 to talk through your options.

For full details of the guidance, please click here.



Expert legal advice you can rely on,
get in touch today:

Please let us know you are not a robot