Lisa Guscott, our Head of Employment Law and HR Services, gives an update on furlough following the recent surprise extension –

The Prime Minister had recently announced a further extension of the Job Retention Scheme (Furlough scheme) which will remain open until December with employees receiving 80% of their current salary for hours not worked up to a maximum of £2,500 per month. In a surprise further announcement on 5th November, by the Chancellor, Rishie Sunak, stated that the scheme will now run until 31 March 2021, but they will review the employers contribution in January.

 The Job Support Scheme, which was scheduled to commence on 1 November has now been postponed until the present Furlough Scheme ends.

 In order to be eligible for payment under this extended scheme, employees must have been on the payroll on 30 October 2020. Employers are able to agree any working arrangements with their employees and can claim for the hours their employees are not working. This is calculated using reference to their usual working hours and broadly follow the same methodology as the original Coronavirus Job Retention Scheme

 Businesses will now have flexibility to bring Furloughed employees back to work on a Part Time basis or furlough them full time and employers will only be responsible for covering National Insurance and Employer Pension Contributions.

 When claiming for the furloughed hours, employers need to record and claim for a minimum period of 7 days. They will need to report the hours worked in comparison to the hours the employee would usually be expected to work during the relevant period. The option to top up employees wages to 100% is available, however there is no obligation to do so. It is worth noticing that the extension to the Job Retention Scheme is nationwide, regardless of the different rules taking place in each individual Nation and there is no requirement for closure of the workplace under Lockdown in order to access this support.

 It is advised that employers obtain Furlough Agreements from their employees in order to cover the updated scheme, particularly if no previous agreements existed. 

This article is for general information purposes only and does not constitute legal or professional advice.For further information contact Lisa Guscott, our Head of Employment and HR here