Extended Coronavirus Job Retention Scheme Guidance released

On 5 November, the Chancellor announced that the Coronavirus Job Retention Scheme (commonly known as the ‘furlough scheme’) which was originally due to end on 31 October 2020 would be extended to 31 March 2021. From 1 November 2020 to at least 31 January 2021, the government will pay 80% of wages for hours not worked up to a cap of £2,500 per month. Employers will have to pay the employer National Insurance and pension contributions on furloughed employees’ pay. This reflects the contributions that were made under the furlough scheme in August. The Government has indicated they intend to review the scheme in January 2021 so there is an expectation that there may be changes to the contributions from February onwards.

The Government has now released updated guidance about the extended furlough scheme. There are several documents including ‘Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme’, ‘Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme’ and ‘Calculate how much you can claim using the Coronavirus Job Retention Scheme’. The guidance is long and employers should be wary not to assume that the rules remain the same as before. There are a great deal of similarities to the former guidance but also several differences to be aware of.

We have set out some of the key points below:

  • From 1 November onwards, an employer can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
  • “Flexi-furlough” will continue to apply whereby employees are able to work some of their hours and be furloughed for the remainder of their normal hours. It will be necessary to document the arrangements in a new agreement.
  • Employers do not need to have used the furlough scheme before to be able to claim for periods from 1 November 2020.
  • Employers can claim for employees on any type of employment contract, including full-time, part-time, agency, fixed term, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed.
  • Employers can continue to claim for a furloughed employee who is carrying out their statutory notice period, but there is no express provision to allow an employer to claim for any contractual notice period. Previously, employers have been able to claim for both statutory and contractual notice periods, however it is not clear at this stage whether that is intended to continue. In fact, the Government says that it will review whether an employer should be able to claim for employees serving their notice and therefore the guidance could change from 1 December.

As before, employers should ensure that they engage with their employees before putting them onto furlough leave as this will constitute an amendment to their employment contract. Our advice is that employers should also engage with employees who are already on furlough leave and will continue to be furloughed during the extended period. Employers must confirm to the employee in writing that they have been furloughed and keep a written record of the agreement for 5 years.

Employers must continue with the record keeping requirements which includes keeping a record of how many hours an employee works and the number of hours they are furloughed for at least 6 years.

Any furlough agreement which is made to have retrospective agreement from 1 November 2020 will be valid as long as it meets the conditions above and is put in place by 13 November 2020.

Our employment law team are on hand to help you to navigate the guidance and assist you with your employment related queries. We can also provide draft furlough agreements to ensure you are meeting your obligations under the scheme. If you have any questions or need any advice please do not hesitate to get in touch.


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