The Chancellor, Rishi Sunak, announced that the Coronavirus Job Retention Scheme (also known as the furlough scheme) will remain open until 31 March 2021.
For claim periods running to January 2021, eligible employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. This scheme is more generous than the arrangements under the Flexible Furlough Scheme in September and October.
The scheme was established if you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19). It enables you to furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough.
NB – The Chancellor has made it clear that the Scheme will be reviewed in January 2021 and so there is no clarity on the contribution expected by employers during February and March.
The full guidance was released yesterday.
From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. For periods from 1 November onwards, you can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
All employers with a UK bank account and UK Pay As You Earn (PAYE) scheme can claim the grant. You do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020.
You can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts.
Don’t forget that if you are intending on making or changing a claim for periods ending on or before 31st October 2020 until the deadline on 30 November 2020.
There was one key element that was interesting to note – in the guidance notes released yesterday, it states:
The Government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.’
This suggests that the rules about making furloughed staff redundant (and using the furlough grant to contribute to the costs of funding their notice period) will, in fact, change soon.
If you are likely to make redundancies over the next few weeks or months, you may need to rethink your strategy now because it looks as though you’ll need to serve notice before 1 December if you want to benefit from the furlough grant.
If you require any additional support then please don’t hesitate to give us a call.
We’ve been helping clients manage their teams through the pandemic including restructure and redundancy programmes from beginning to end – we can help to lighten your load and give you peace of mind that everything is covered.
Carole is a results focused HR Director with an abundance of experience within the retail sector. She has worked strategically in a fast-paced and evolving business and has added enormous value to the business. Carole’s collegiate approach has enabled us to work together on a number of cross-Group HR projects where she brought a pragmatic, experienced and fun approach; I enjoy working with Carole and she is a credit to our profession.