Extension of CJRS

By Michael Nadin – Associate Solicitor

The Coronavirus Job Retention Scheme (CJRS) was originally due to end on 31 October 2020, when it would be replaced by the new Job Support Scheme (JSS).

However, on 31 October 2020, Prime Minister Boris Johnson made a televised announcement that England will go into lockdown from 5 November to 2 December, in a bid to tackle rising cases of COVID-19 and prevent the NHS being overwhelmed.

During lockdown a number of businesses and venues will need to close and in an attempt to mitigate the economic damage from this and prevent mass redundancies, the government has announced that the CJRS would be extended by a further month.

This will provide additional support to businesses during the England national lockdown which is due to commence on 5 November 2020.

During November 2020, the CJRS will be open to employees on the payroll on 30 October 2020 and employers will be able to claim 80% of an employee’s wages, capped at £2,500 for hours not worked.

On 5 November 2020 the chancellor made a further announcement that the CJRS would be extended until at least 31 March 2021.

For claim periods running to the end of January 2021, employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The percentage may be reviewed for February and March.

Both flexible and full furlough are permitted, and employers can choose to top up employees’ wages. Employers will be required to pay the national insurance and employer pension contributions on employees’ furlough pay.

Employers will be able to furlough employees for the first time in November, as long as they were on the payroll on 30 October 2020.

The extended CJRS will be open to all employers and operate as previously, with employers being paid upfront to cover wage costs. However, there will be a short period where the claims portal will need to be updated and employers will be paid in arrears for that period. Claims will need to be for a minimum seven consecutive calendar day period.

Employers should enter into a further flexible furlough agreement if they wish to continue to claim for employees under the CJRS.  However, depending on the content of the original agreement, a letter confirming the extension of an employee’s previous flexible furlough agreement might be sufficient.

Employers who were intending to move their employees onto the JSS and have entered into agreements with employees to that effect will also need to consider revising the start date of that agreement by way of an explanatory letter or a revised agreement.

It is also worth noting that if an employee was on payroll on 23 September 2020 but was made redundant or stopped working after that date, they can qualify for the scheme if the business agrees to re-employ them.

If you would like any help or advice, please do not hesitate to get in touch by email here or call us on 01604 609560

DFA Law

November 2020