Coronavirus Update: Furlough extended until 31 March 2021

The furlough scheme was due to end on 31 October 2020 and extended to 2 December 2020. The Chancellor has just announced that it will be extended further to 31 March 2021 and reviewed again in January.

On the plus side this offers more certainty to businesses trying to weather the storm of forced closures. However, it also indicates that a national lockdown of 4 weeks is unlikely to be enough and the government is preparing us for further regional and national restrictions over the coming months.

Here is what we know so far:

1. The government will pay 80% of wages (subject to a cap of £2,500 per month) for employees’ hours not worked.
2. Employers will need to cover National Insurance and employer pension contributions for all contracted hours whether they are worked or not.
3. There is no requirement for employers to contribute to a furloughed employee’s wages for hours not worked, although they can do so if they wish.
4. Businesses have flexibility to ask furloughed staff to work any of the contracted hours that are required according to their needs.
5. Making a claim under the furlough scheme will work in the same way as previously, i.e. claiming either shortly before, during or after running payroll.
6. Individuals do not need to have been furloughed previously to go onto the scheme and employers can utilise it regardless of whether they did so before.
7. An employer can claim for employees on their PAYE payroll on 30 October 2020. The employer must, however, have made a PAYE Real Time Information submission to HMRC between 20 March and 30 October 2020 notifying a payment of earnings for that employee.
8. Anyone made redundant or who stopped working after 23 September 2020 can be rehired and furloughed. As above, the employer must have made a PAYE Real Time Information submission to HMRC between 20 March 2020 and 30 October 2020 notifying a payment of earnings for that employee.
9. In addition, cash grants of up to £3,000 per month will be available for businesses which are forced to close due to either national or local lockdowns.
10. The Job Retention Bonus of £1,000 will no longer be paid. The government has said that it will ‘redeploy a retention incentive at the appropriate time’. (The Job Retention Bonus was going to provide a one-off £1,000 grant to employers for each previously furloughed employee kept in viable employment until at least 31 January 2021).
11. The Job Support Scheme is on hold and furlough has replaced it.

We are expecting full details to be published next week and will keep you updated on developments.

If you have any questions about furlough, coronavirus planning or any other employment related queries then our Employment lawyers are on hand to help.