Employers, who are not able to maintain their workforce due to COVID-19, have the option of furloughing employees. Helping employers to cover a portion of the regular monthly wage cost of the employee, they can notify them as a furlough.
The Coronavirus Job Retention Scheme (CJRS) has now been extended until 30 April 2021, and employers can claim 80% of an employee’s salary for hours not worked, up to a maximum of £2,500 per month.
Under this temporary scheme as an employer, you can claim for employees who were employed on 30 October 2020, as long as you have made sure to submit PAYE RTI notifying a payment of earnings for that employee to HMRC between the 20 March 2020 and 30 October 2020. Again, this could differ based upon:
- where you have made employees redundant,
- whether they stopped working for you on or after 23 September 2020
- whether you have subsequently re-employed them
Employers may furlough employees for any duration and any work pattern, and still claim the grant for the hours not worked. It can be used for employees whose jobs are not feasible during coronavirus, and to help support parents caring for children, or those with other caring responsibilities during the pandemic situation.
There are many reasons why an employee may be unable to work, including clinical vulnerability or due to caring responsibilities.
An employee can be furloughed, irrespective of being a full-time, part-time, agency, flexible or zero-hour contract, but they must have been on the payroll before the extension was announced.
During the furlough, employees are free to take up other jobs, but they should not break the rules of the primary employer contract. They are also permitted to participate in training or volunteer programmes that may not be connected to the employer.
Key developments on Furlough schemes
- The Coronavirus Job Retention Scheme (CJRS) is now extended until 30 April 2021.
- Under this extended scheme, employers can claim 80% of employees’ salaries, up to £2,500.
- Employers will have to pay National Insurance and pension contributions.
- Employers can claim for the employees’ salaries under the scheme even if they have never used the CJRS before or have not furloughed employees earlier.
- There is no limit on the number of employees who can be furloughed in an organisation.
- Employers should have employees’ agreement to either extend furlough or put new employees on furlough.
- Employees can work part-time and receive a furlough grant for their unworked hours under the Flexible furlough scheme
- From February 2021, HMRC will publish the names of companies and LLPs who have made claims starting on or after 1 December 2020, along with the value of the claim.
- From February 2021, HMRC will share with furloughed employees the complete details of claims made for them starting on or after 1 December 2020 through the employee’s Personal Tax Account on Gov.UK.
- Job Retention Bonus – As of February 2021, the retention incentive will be “deployed at the appropriate time” because the policy intention behind the Job Retention Bonus has fallen away.
- The Job Support Scheme is postponed until further notice.