In yet another major policy development, the Chancellor, Rishi Sunak, has announced today that the Coronavirus Job Retention Scheme ("CJRS") will now be extended for all parts of the UK until the end of March 2021 in an effort to give businesses and employees certainty over the winter months.
As ever the political announcement comes today, and the detail will come later, but the following is a high level note for all employers who have availed of any form of JRS, flexible or other furlough over the past seven months or who were planning to avail of the JSS scheme and the Job Retention Bonus (JRB) see later.
The CJRS extension will run until at least the end of March 2021 on the basis that employees will receive 80% of their normal salary for hours not worked, up to a maximum of £2,500 per month. It will be reviewed in January to assess if economic circumstances have improved enough for employers to be required to increase the level of their contribution or the necessity for the scheme continuing to end March at all.
Further guidance will be published next week to set out more detail on how calculation of payments should be approached, however the key points set out by the Chancellor today are:
- Employee eligibility
Employers can claim even if they, or the relevant employees, had not previously used the CJRS. Employers can claim for employees or workers who were employed and on their PAYE payroll on 30 October 2020. Employers are able to re-employ and claim in relation to employees who were on the payroll on 23 September but who were made redundant or stopped work after this date.
- Employer flexibility
Business will be allowed to claim under the Scheme for employees who still do some work as well as for employees furloughed completely, in other words, the flexible and part time furlough schemes will continue.
- Employer contribution
Until at least the end of January 2021 employers will not be required to contribute to wages for hours not worked. Employers will only have to cover National Insurance and Employer pension contributions. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.
In light of the above extension the Job Support Scheme and the Job Retention Bonus have been put on hold. There is a suggestion that the JRB (which provided £1000 per affected employee still retained by the end of January) will be abandoned altogether – albeit that some other form of retention incentive will be deployed at the appropriate time. It remains to be seen whether the Job Support Scheme will be required after March 2021.
In other words – watch this space!
If you have any questions or need advice following this latest update, please do not hesitate to contact Gareth Walls, Partner, Jonathan Simpson, Associate or any other member of the ALG Belfast Employment team.
Date published: 5 November 2020