Coronavirus Job Retention Scheme – As of 2nd November 2020
2nd November 2020
Following the announcement of the four week lockdown from this Thursday, 5th November, the government has extended the Coronavirus Job Retention Scheme ‘CJRS’ until 1 December 2020.
To confirm, this means the Job Support Scheme is now delayed and will only come in to place when the CJRS is closed.
Some key points:
- Employees furloughed are entitled to receive 80% of their pay.
- The scheme has resorted back to being more generous for employers and 80% of the pay will be paid by the government. However, employers will have to cover the costs of employers pension and national insurance contributions for hours not worked.
- The amount claimed back is capped at £2,500.
- You have the option of paying staff that are furloughed their full pay and then claiming the 80% back under the government scheme.
All affected employers can use the full CJRS, you do not have to have used the scheme previously.
- Staff can only be furloughed if they were on the payroll on 30 October 2020. This means that they must have been included on an RTI submission by at least this date.
- Employees can be on any kind of contract fixed term, zero hours, apprentices, company directors and also agency workers who can be furloughed through their agency.
- Formal shielding is not going to continue and therefore the guidance is unclear on whether someone can be Furloughed if they are affected by Covid 19 or self-isolating.
- Flexible furlough will also continue, this is the facility to bring back employees part time and furlough for the rest of the time. A reminder of this scheme is on the next page.
- For staff to be placed on Furlough in full or flexibly, there must be an agreement in writing between the employee and employer to do so.
- Employees are able to take holiday during this period of Furlough and if it is classed as holiday then this is at full cost to the employer and the employee would get 100% of their pay.
- Staff on furlough leave are able to work for other employers or do voluntary work as long as their employment contract and their furlough agreement with you permits this.
- If there is a view that the business will suffer enough that it is permanent and therefore redundancies should be made, then these can be made irrelevant of staff being on furlough leave. However businesses are not permitted to use furlough money to fund redundancy payments.
- It is not clear in the CJRS guidance whether the furlough scheme can be used for staff serving their notice. However it was clearly stated in the new Job Support Scheme that if staff are serving their notice they cannot be claimed for, there is a general view that this new CJRS is likely to follow this point.
- The scheme has been extended for November 2020. For this period the rules will be the same as those in August 2020, ie. For any normal hours not worked the employee will receive 80% of their pay with this funded by the government.
- The employer will be responsible for paying any related pension or NIC costs.
- A written agreement must be in place for flexible furlough to be in place.
- The claim will be in respect of the difference between the employees “normal hours” and the hours they actually work.
As a reminder, the following is relevant when trying to work out the normal hours;
For people on fixed hours:
-Start with the hours the employee was contracted to work in the last pay period, prior to 30 October.
-Divide that by the number of calendar days in the repeating working pattern, including non-working days.
-Multiply by the number of calendar days in the pay period or partial pay period.
-Round up to the nearest whole number.
To clarify “normal pay” will be the amount the employee received in the pay period to 30 October 2020.
For people on variable hours:
- Use the number of hours worked in the last tax year as per the payslips or the hours worked in the corresponding pay period last year. Include any hours of annual leave any overtime.
-Start with the hours worked.
-Divide by the number of calendar days the person was employed.
-Multiply by the number of calendar days in the pay period.
-Round up to the nearest whole number
- If the employee has not been employed for that long then you can use their average since they started work.
- You should not include discretionary bonuses, tips, non-compulsory commission or non-cash payments. You can include compulsory commission, overtime and fees.
HMRC will be updating the guidance on the CJRS schemes and also updating the calculators you can sue to work out the furlough claims. CLICK HERE
If you would like to talk to us about how the CJRS may work for your business or want assistance with the claims then please get in touch with Mark Hook, firstname.lastname@example.org or 0116 282 7000.