With the UK in another lockdown, here are some reminders about furlough and how the Coronavirus Job Retention Scheme (CJRS) is working.
2021 should, despite the unpromising start, be the beginning of the end for the many difficult decisions employers have been forced to make in light of the Covid-19 pandemic. However, with the announcement of the third national lockdown and the closure once again of many businesses, we have pulled together our top five reminders about furlough and how the CJRS is currently set up.
#1 – What are the key dates?
You can only claim for employees who were on your payroll by 30 October 2020, with a RTI submission made to HMRC between 20 March and 30 October 2020.
The CJRS will continue for claims until the end of April 2021 but at the Budget currently scheduled for 3 March 2021, we are expecting Rishi Sunak to report on the next phase of the plan to protect jobs affected by the pandemic.
#2 – What can be claimed?
The Government contribution will be 80% for hours not worked, up to a limit of £2,500 per month. This contribution will not be changed before the scheme ends in April 2021.
The calculation method for pay and hours will vary depending on when RTI submissions were made for an employee (the key date being 19 March 2020) and whether you have previously made a valid furlough claim.
The 80% can be claimed against holiday (which must be topped up to 100% by the employer) but not against redundancy payments or notice periods.
Employers must pay for any hours worked in full and must pay pension contributions and NICs for any furloughed hours as well.
#3 – Can we still use flexible furlough?
The extended CJRS can be used for both full and flexible furlough. There are no restrictions on what working patterns are put in place but these must be agreed with your employees and you will need to be able to evidence that agreement.
#4 – Can we use furlough to cover shielding employees, those with caring responsibilities and those on sick leave?
The scheme can be used to furlough both employees who are shielding (but not those who live with them if they are not themselves required to shield) and those who are unable to work due to caring responsibilities (including childcare).
Employees on sick leave can be furloughed but furlough should not be used solely to cover short-term sickness absence. Unless an employee is shielding, there should still be a business reason to furlough.
#5 – Do employees have to have been furloughed before?
No, provided they meet the date requirement above, there is no need for that particular employee to have been previously furloughed or indeed for any furlough claim to have been made previously at all.
You can read all the detail about furlough and the CJRS in our article here.