The Treasury has now published a 31 page Schedule to the existing Treasury Direction which sets out the legal framework for the extended Coronavirus Job Retention Scheme (CJRS). The Schedule sets out detailed rules relating to the operation of the CJRS.
To summarise, the Government will pay up to 80% of an employee’s normal pay up to a cap of £2,500, and employers will only be responsible for paying pension and National Insurance contributions. This in effect mirrors the CJRS back in August. However, the extended CJRS is open to new entrants (i.e. there is no requirement for the employer or the employee to have previously used the CJRS to be eligible). Under the extended CJRS employees can be fully furloughed (for all of their normal hours) or flexibly furloughed.
- The Schedule covers claims for CJRS from 1 November 2020 until 31 January 2021; a further Schedule/Direction will be issued to cover claims between 1 February and 31 March 2021.
- The Schedule withdraws the Coronavirus Job Retention Bonus (which was due to be paid in January 2021).
- Integral to the purpose of CJRS is that the instruction given by the employer to furlough (or flexibly furlough) employees is given by reason of circumstances arising as a result of coronavirus and coronavirus disease or the measures taken to prevent or limit its further transmission.
- It is necessary for employers to have a written agreement with employees covering the furlough period. The agreement must be put in place before the beginning of the claim period (but may subsequently be varied to reflect any agreed variations between the parties). Since 13 November it is no longer possible to backdate the furlough agreement. The furlough agreement must be kept by the employer for at least 5 years after it is made.
- By making a claim for CJRS, an employer is accepting that their name and the amount (or a reasonable indication of the amount) of the CJRS claim (in December 2020 and January 2021) will be published by HMRC on gov.uk for a period of 12 months. HMRC may withhold the employer’s information, if they are satisfied that publication will expose a serious risk of violence or intimidation to any individual (this includes the employer, a director, officer or employee) or any individual living with them.
- For an employee to qualify for CJRS, they must be on the employer’s PAYE scheme registered with HMRC’s RTI on or before 30 October 2020.
- CJRS claim period must begin and end in the same calendar month and relate to a period of 7 or more consecutive days. The claim period is the days of the month that the employer is claiming the grant for; and as such will include all employees furloughed or flexibly furloughed. To clarify, there is no requirement for employees who have been flexibly furloughed to work 7 days consecutively to be eligible for the grant. However, the guidance recommends that you should not submit your claim for those who have been flexibly furloughed until you are sure of the exact number of hours they will have worked during the claim period.
- It is still possible for employers to make staff redundant whilst furloughed or afterwards (albeit the CJRS cannot be used to substitute redundancy payments).
- There is a significant change in that a claim cannot be made for any day where an employee is serving notice of termination (for whatever reason) between 1 December 2020 and 31 January 2021. Up to 30 November 2020, an employer can continue to claim a grant under CJRS for employees who are serving their notice.
- Claims for the CJRS grant must be made to HMRC before the deadline day;
- 14 December 2020 in relation to the November 2020 CJRS extension calendar month;
- 14 January 2021 in relation to the December 2020 CJRS extension calendar month;
- 15 February 2021 in relation to the January 2021 CJRS extension calendar month.
- HMRC states that payments will be made 6 working days after the claim is submitted.
The Government will review the CJRS in January 2021, at which point we expect that there will be a move towards employers making contributions to the CJRS (similar to those imposed from September 2020 to 31 October 2020).
This is only intended to be a summary and not specific legal advice. If you would like further information or advice about drafting furlough agreement, or advice generally about managing your workforce during these unprecedented times, please do contact a member of our employment law team.
Angharad Ellis Owen (firstname.lastname@example.org | 01284 717453).
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