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The Coronavirus Job Retention Scheme (CJRS), which was due to end on 31 October 2020, has been extended until 31 March 2021.
The government has increased their contribution and will pay 80% of wage costs for hours furloughed employees do not work, up to a cap of £2,500, proportional to the hours not worked, from 1 November until 1 January 2021. The government will review the scheme in January to decide whether economic circumstances are improving enough to ask employers to contribute more. Additionally, further guidance is due to be released at the end of the November to clarify whether employees in their contractual or statutory notice periods will be eligible for the CJRS.
Neither employer nor employee needs to have used the CJRS previously to be eligible, and you can claim for any employee who was on your PAYE payroll on 30 October, or any employee who has been re-employed after being made redundant who was on your payroll as of 23 September.
Employees who were previously not eligible for the CJRS but who are eligible under the extended scheme, are to use an alternative calculation for reference pay and usual hours, to consider the updated reference periods. Employees previously eligible under the CJRS, regardless of whether a claim was made for them prior to 31 October, will continue to use the previous calculations.
Although employers can decide whether employees are to be flexi-furloughed (i.e. work part-time and claim under the CJRS for hours not worked) or furloughed full-time, it is worth noting that HMRC will publish details of any employers who make claims under the extended CJRS scheme from December onwards as somewhat of a deterrent.
Employers will still need to pay all National Insurance Contributions (NICs) and pension contributions and should ensure that the furlough agreement is consistent with employment, equality and discrimination laws as well as keep a written record of the furlough agreement for five years, and a record of how many hours their employee works/are on furlough for six years.
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