Posted on 18.11.20
At the beginning of the month, the government announced the extension of the Coronavirus Job Retention Scheme to support businesses and individuals throughout the second national lockdown in 2020 caused by the COVID-19 pandemic.
The scheme has been extended until 31st March 2021, but the support amount has only been confirmed until January 2021, when it will be reviewed.
We take this opportunity to summarise the key elements of the scheme in light of this extended support.
How much are furloughed employees entitled to?
Furloughed employees will receive 80% of their salary for hours they have not worked, up to a maximum of £2,500 per month. Employees should be paid as normal for any hours they have worked. Employers will pay pension and National Insurance contributions for their employees.
This position will however be reviewed in January next year to decide if employers will be required to contribute more based on the economic circumstances.
Who can the employer claim for?
Employers can claim for employees who were employed and on their payroll on 30th October 2020. Employers must have made a Real Time Information (RTI) submission to HMRC to notify them of a payment of earnings for its employees between 20th March 2020 and 30th October 2020.
To be eligible for the grant, employers must have confirmed to their employees in writing that they have been furloughed or flexibly furloughed.
Reasons for putting employees on furlough
There are various scenarios where employers can choose to furlough their employees including:
- Business reasons – which will inevitably entail a downturn of work for reasons associated with the virus;
- Health – employees who need to shield in line with the government guidelines or need to stay at home with someone who is shielding;
- Caring responsibilities – caused by coronavirus, which includes parents that need to look after their children.
The furlough scheme is not designed for short-term sickness absences, but if an employer decides to furlough employees that are currently off-sick they can do so.
Additionally, any furloughed employees who become ill (for any reason, not just because of COVID-19) need to be paid at least Statutory Sick Pay (SSP), but it is up to the employer to decide whether to pay employees furlough rates or move to pay them SSP for the time that they are unwell.
However, if an employee is contractually entitled to full-pay during sickness absence they should receive this unless the furlough agreement with their employer explicitly states otherwise.
Can employees be re-employed to be put on furlough?
Any employees who were employed and on payroll on 23rd September 2020, but left the organisation or were made redundant since then can be re-employed and claimed for.
What are the furlough options available at the moment?
- Fully furloughed employees – this means the employee does no work for the employer.
- Flexibly furloughed employees – this means employees can work for any amount of time, and any work pattern and claim the grant for the furloughed hours, with reference to hours the employee would usually have worked in that period.
What happens when employees are on furlough?
During the time employees are on furlough they cannot do any work that makes money or provides services for their employer or any other organisation connected to their employer. However, employees can participate in training, volunteer for another employer or organisation, or work for another employer as long as it’s contractually allowed.
Employees on furlough will also keep their rights at work such as SSP, annual leave, maternity & parental rights, redundancy payments and they have to be paid at least statutory National Minimum Wage for hours worked.
Employers can still make staff redundant whilst on furlough but for claim periods that start on or after 1 December 2020, employers will not be able to claim for any days after that date during which the employee was serving a period of notice.