The Government has published further guidance on the extension of the Job Retention Scheme or furlough. Although it previously outlined that furlough was to be extended for one month, the scheme will now run until 31 March 2021. There will be a review in January 2021 to decide whether employees will be required to make contributions.
The rules for the extended furlough scheme can be summarised as follows:
- Employees will receive 80% of their current salary for hours not worked, up to a cap of £2,500;
- Although flexible furlough agreements can last any amount of time, in general, the period that you claim for must be for a minimum claim period of seven calendar days;
- Employers can agree to furlough employees retrospectively, with effect from 1 November. To do this, an agreement must be made by Friday 13 November;
- There are now monthly deadlines for claims. Claims for periods starting on/after 1 November must be submitted within 14 calendar days of the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday.
- Employees who were on an employer’s PAYE payroll by 23:59 on 30 October 2020 as well as any employees who were made redundant or stopped working on or after 23 September, if they are rehired, are eligible;
- As before, employees can be on any type of contract;
- Neither the employer nor the employee needs to have previously used the furlough scheme to be eligible;
- Where there has been a TUPE transfer or change of ownership, an employer is able to claim for employees of a previous business provided the employees have had a previous claim submitted by their prior employer; and
- Employers can continue to claim for a furloughed employee who is serving a statutory notice period but grants cannot be used to substitute redundancy payments. There is no reason why the grant should not apply to contractual notice periods but two Government publications from yesterday are unclear. There are assurances that further guidance is to follow in late November.
- Employers will be able to claim a grant and will only be asked to cover National Insurance and employer pension contributions for the hours the employee does not work;
- Employers are still able to choose to top-up employee wages above the scheme grant, at their own expense, if they wish; and
- All employers with a UK bank account and UK PAYE scheme can claim the grant.
- Employers can still ask employees to work part-time (flexi-furlough) and claim the grant for the unworked hours, provided they keep a record of the number of hours an employee has spent working and/or furloughed.
- Employees are still able to accrue leave whilst on furlough and are able to take leave whilst furloughed. Any hours taken as holiday during furlough leave should be recorded as furlough hours, not working hours; and
- Where an employee usually works on bank holidays, it can be agreed that this is included in the grant payment. If the employee does not usually work on bank holidays, the employer must either top up their usual holiday pay, or give the employee a day of holiday in lieu; and
- Holiday is paid at the normal rate of pay.
Training and apprentices
- Apprentices can be furloughed in the same way as employees. They can also continue to train whilst furloughed, provided they are paid the minimum wage for the time they are training. This means employers must make up any shortfall between the amount claimed under furlough and their appropriate minimum wage; and
- Employees are able to undertake training during hours in which they are recorded as being furloughed as long as the training does not generate revenue for, or provide services to their employer. Where an employee undertakes training, they are entitled to be paid at least their minimum wage.
- Employees who are union or non-union representatives may undertake duties and activities for the purpose of individual or collective representation of employees or other workers whilst on furlough.
- In all cases, employers must confirm, in writing, that they intend to place their employee on furlough leave and agree the terms of the furlough in the usual way. If choosing flexible furlough, they must set out how this will work and make sure the agreement is consistent with employment, equality and discrimination law;
- A written record of the agreement must be kept for five years; and
- From December 2020, HMRC will publish details of employers that have made claims under the scheme for the month of December onwards.