November 10, 2020
Frequently asked Questions
1. How does the extended CJRS scheme work?
Under the furlough extension:
- employers agree with employees that they go on furlough;
- employers then claim for a grant to pay employees 80% of their current salary for hours not worked, up to a maximum of £2,500, as they did from March to August;
- employers will have to pay employer National Insurance Contributions and pension contributions for the hours the employee does not work. Hours worked should be paid in the usual way;
- employers can choose to top up furlough payments if they wish;
- furlough can be full-time or flexible/ part-time furlough, but the minimum reporting and claim period for furlough is seven consecutive days;
2. Can I use the Furlough scheme now even if I have never used it before?
- employees do not have to have been previously furloughed to now be put on furlough but they must have been on the employer's UK payroll as at 30 October;
- for employees who haven’t previously been furloughed, there are new methods to calculate their reference pay and usual hours.
- where employees were previously furloughed, the previous calculation methods will apply, although those guides are still to be updated; and
- employees who were made redundant after 23 September can ask their previous employer to re-employ them and place them on furlough, although the previous employer is not obliged to re-employ them.
3. Do we need to issue new letters for the extended furlough scheme?
It is advisable to issue new letters and keeping these records for the six years required by HMRC. This is for two reasons:
- employees may not have had a legitimate expectation that the scheme would be extended beyond 31 October 2020, given all the announcements prior to that date to the effect that it wouldn’t be extended; and
- to meet the anticipated requirements of the furlough scheme.
This is the case even where a previous letter envisaged a possible extension to the scheme.
4. Can employees take annual leave during furlough?
It is clear that annual leave will continue to accrue during furlough. On 13 May, the government issued additional guidance on holiday entitlement and pay during coronavirus. Employers will also want to take note of the ACAS guidance on holiday pay, as employment tribunals will take that into account.
The policy paper simply confirms that employees will retain their existing statutory rights in relation to annual leave.
5. Public holidays
In the run-up to Christmas holidays, employers will be starting to think again about public holidays. Where a public holiday would normally have been taken as annual leave, the employer can either assign the public holiday as a day of annual leave or defer the bank holiday and allow the employee to take that day at another time.
6. Does the business have to suffer an economic impact to use the furlough extension?
The scheme purpose is stated in the policy paper to be "to support individuals and businesses who are impacted by disruption caused by COVID19 this winter" however a definite answer will not be known until the full guidance and Treasury Direction are published.
7. Can we furlough employees who are shielding?
Yes. Helpfully, the policy paper sets out clearly that furlough can be used for shielding employees or employees with caring responsibilities:
"Employees can be furloughed where they are unable to work because they:
- are shielding in line with public health guidance, or need to stay at home with someone who is shielding;
- have caring responsibilities resulting from coronavirus, including employees that need to look after children."
8. When can claims be made?
The claim portal is to open from 08:00 on Wednesday 11 November 2020.