Further guidance on furlough extension published

Following the chancellor’s announcement last week on further adjustments to the coronavirus support schemes available to businesses, which includes extending the current Coronavirus Job Retention Scheme (furlough) to the end of March 2021, further guidance has now been published. The extended furlough grant will cover the same costs as those that applied in August 2020. Employers can claim 80% of an employee or agency workers usual wage for non-worked hours, capped at £2500 per month, but will remain responsible for employers national insurance and pension contributions. The level of support is to be reviewed in January 2021.

The extended scheme will operate much as before, with flexible furlough remaining in place, meaning that employees can do some work if required whilst being furloughed for the remaining time. The reason for the reduction in hours or cessation of work should be for a reason related to the pandemic and shielding employees can also be furloughed. The extended furlough can be applied to staff who have not previously been furloughed as long as they have been on payroll and paid prior to 30th October 2020. Employers must obtain a written agreement with any staff that they place on furlough.

The extension may seem to have come too late for those staff already made redundant. However, the option exists to rehire, and put back on furlough, employees made redundant on or after the 23rd September. This is not obligatory and if redundancy and notice payments have been made then there is likely to be additional administration involved in doing so.

The government has also announced that the details of any company making claims from December onwards will be made public. The reason behind this is unclear, but the effect is likely to place businesses who use the scheme under greater public scrutiny.

The scheme is, as before, open to agency workers, however, the requirement to make contributions may mean that this is not a viable commercial option for all. The scheme may still work for lower paid workers or those choosing to opt out of auto enrolment pension schemes where costs are low or negligible, or if in the short term, a client is willing to meet the contribution as a means of retaining staff.

As a result of the extension, the job support scheme and job retention bonus have also now been postponed.

Contact Lawspeed on 01273 236 236 or info@lawspeed.com should you require assistance, with any aspect of furlough, redundancy, rehire or any other employment issues.