On Wednesday 10 November 2020, the Government published guidance for the Extended Coronavirus Job Retention Scheme with a further important change confirmed on Friday 13 November 2020. Building on the earlier information released, we have brought you details of the important considerations that need to be made in light of this new guidance and the new deadlines that may affect your business decisions.
Important New Deadlines
- Employers can agree retrospectively to furlough someone with effect from 1 November 2020, as long as the agreement to retrospectively claim furlough occurs on or before this Friday 13 November 2020.
- If an employer is considering dismissing an employee (whether for redundancy or otherwise), you are advised to give them notice before 1 December 2020. This is because the government has now confirmed (13.11.20) that employers cannot claim for employees serving contractual or statutory notice periods for claim periods starting on or after 1 December 2020.
Furlough Scheme Extended Until 31 March 2021
- From 1 November 2020 to 31 January 2021, the UK Government will pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month. Employers must pay NI and pension contributions. These are the same furlough rates as for August 2020. The government is committed to paying 80% of wages to 31 January at which point they will be reviewing the economic situation with a view to assessing the support. It is anticipated that the government contribution will be reduced on a phased basis as they have done previously.
- Employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee, unless they re-employed an employee after 23 September 2020.
- There is no maximum number of employees that employers can claim for under the extended furlough scheme.
- Employees returning from maternity leave need to give the statutory eight weeks' notice to end maternity leave early in order to be furloughed (and receive furlough pay which is typically higher than SMP). The guidance does not deal with the issue of an agreement made between the employer and employee to shorten that eight week period.
Written Furlough Agreements
- Employers need to have written signed agreements in place with employees and to keep these records for 5 years for HMRC compliance.
- HR:4UK can provide our clients with extended furlough leave agreement forms and covering letters that comply with this latest guidance.
- As these new agreements will supersede all previous agreements, we are advising our clients to issue these new furlough agreements to all employees for whom claims will be made using the extended furlough scheme. This will ensure that you have a clear record of the terms of agreement going forward.
Employees Who Do Not Agree to Furlough Leave
- If an employee does not agree to be put on furlough leave, employers can make the employee aware that furlough is more favourable than other options such as lay-off, short-time working, using any remaining annual leave, unpaid leave or redundancy. For redundancy, we advise caution as employers need to be able to satisfy the test that the role no longer exists.
HMRC To Publish Names of Companies Claiming Furlough
- From December 2020, HMRC will publish company and LLP names and registration numbers of those who have made claims under the scheme for the month of December 2020 onwards.
30 November 2020 Furlough Claim Deadline
- The final deadline to submit claims for the period up to 31 October 2020 is still 30 November 2020.
FREE HR Webinars With Live Q&As
HR:4UK offer a range of free HR webinars for guidance on furlough changes. To help get answers fast to your important questions sign up here today.
We will also highlight other funds available such as the Kickstart Scheme, which pays 100% of the wages for a 6 month work placement for 16-24 year olds. If you don't have the minimum 30 placements required for the Kickstart Scheme, we can help you apply. Interested in extra help for your business? Then contact us today.