Further guidance on the extended furlough scheme
Further to our update on the Government’s decision to extend the Coronavirus Job Retention Scheme (CJRS) to 31 March 2021, the Government has now published further guidance on how this extended furlough scheme will operate.
In terms of the guidance itself, and has been the case with the CJRS throughout, working your way through the Guidance is not straightforward. Rather than just producing one document highlighting the changes, the Government has amended the multiple guidance notes.
Having reviewed the updated guidance, and whilst a lot of aspects of the scheme are unchanged, there are some key points to note:
- The updated guidance does state: “The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.” This could mean that if an employer furloughs an employee and then on or after 1 December 2020 gives them on notice of termination of employment, for example, by making them redundant, that the employer will no longer be able to claim that employee’s wage costs under the CJRS. This is likely to be a key issue for employers as to whether they keep employees on furlough even if they think they are not going to be required at the end of the furlough scheme
- The updated guidance confirms the Government will pay 80% of wages for hours not worked up to £2,500 per month and that the scheme will be reviewed in January 2021. This could mean that in addition to the employer NIC and employer auto-enrolment pension contributions that an employer needs to make under the extended CJRS, that employers are asked to contribute further to the costs of the scheme in order to access the CJRS. This could see a return to how the scheme operated in September and October 2020 with the employer being required to contribute to a percentage of wage costs
- Somewhat surprisingly, the updated guidance also states: “From December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards”. The Government hasn’t previously published details of those employers that are claiming under the scheme and no rationale is provided as to why this is now going to be the case. You would hope that given the reason the scheme was introduced in the first place this isn’t a roundabout way of trying to “name and shame” employers who use the scheme to discourage take up.
If you have any questions or need any assistance on the extended furlough scheme, please contact Moorcrofts Employment Partner, Matt Jenkin.