Legal answers: Staying on top of the Job Retention Scheme rules

The government’s Coronavirus Job Retention Scheme was extended after a second lockdown was needed. The scheme operates until the 31st January 2021 in its current form, where it will be reviewed again. Taylor and Emmet’s head of Employment Law Kelly Gibson explains how the system works.

We all now know that the length that the Coronavirus Job Retention Scheme, (CJRS), has been extended, and could well last into the spring next year. So, until the end of  January 2021, “If you cannot maintain your workforce because your operations have been adversely affected by coronavirus (COVID-19), you can 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,” according to official guidance.

The government intends to review the scheme rules in January 2021 (when it’s expected that further guidance will be published to govern how the CJRS will operate from 1st February 2021 to 31st March 2021).

But until 31st January 2021, employers can claim 80% of an eligible employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. To be eligible, an employee must have been employed on 30th October 2020 (and a PAYE RTI submission must have been made to HMRC during the period 20th March 2020 – 30th October 2020, notifying a payment of earnings for that employee).

HMRC will publish employer names, an indication of the value of the claim and, for companies and Limited Liability Partnerships, the company registration number of those who have made claims under the scheme for the month of December onwards. Further detail on how HMRC will give an indication of the value of the claim will be available from late November.

The Job Support Scheme (Open) and Job Support Scheme (Closed) that were due to be introduced on 1 November 2020 are on hold. In addition, the Job Retention Bonus Scheme in which a £1,000 grant was to be payable to employers for each employee who had previously been furloughed but who remained in meaningful employment on 1st February 2021, is to be withdrawn.

Employers are able to re-employ employees who were made redundant or stopped working on or after 23rd September 2020 and put them on furlough.  This applies as long as the employee was employed and on an employer’s PAYE payroll on or before 23rd September 2020 (this means that an RTI submission notifying payment in respect of the employee must have been made between 20th March and 30th October 2020).  

Employers cannot claim a furlough grant for any notice periods (contractual or statutory) running between 1st December 2020 and 31st January 2021.

There are a number of documents that you should read to make sure that the furlough scheme is right for you and your employees. They give advice on how to claim for wage costs through the scheme, which employees can be put on furlough and how much you can claim.

One date that you should be aware of is 14th December, the deadline for submitting claims for furlough days in November.

This article should only be considered as guidance and should not be taken as specific legal advice. To claim your free 45 minutes of legal guidance with Taylor & Emmet Solicitors as part of your IMI membership call 08701 200009.