January 11, 2021
HMRC have extended the guidance for who can go onto Furlough, or flexible furlough to cover employees whose health has been affected by coronavirus (COVID-19) or any other conditions, including if they are unable to work from home, or working reduced hours, because they:
- are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance
- have caring responsibilities resulting from coronavirus (COVID-19), such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in their household
Guidance was updated on 10 December to clarify that employers may furlough shielding employees even where they are not closed or facing a wider reduction in demand. This provides significant flexibility for employers to secure the JRS grant in circumstances where they may not otherwise qualify for it in light of the ‘exceptional purpose’ of the JRS, which is to provide assistance to employers whose operations have been ‘severely affected’ by the pandemic.
It should be noted that the same flexibility does not appear to be extended to the furlough of employees who have caring responsibilities resulting from coronavirus. Employers are likely, during times of school closure, to consider furlough for employees whose usual childcare arrangements have been disrupted by the closures. It appears that employers will still need to demonstrate that they have been severely affected by coronavirus in order to make a valid JRS claim for such employees.
What are the latest timeframes for furlough/ flexible furlough?
The Coronavirus Job Retention Scheme (CJRS) will now run until the end of April 2021with employees continuing to receive 80% of their current salary for hours not worked.
This can be full or part-time. An employee on flexible furlough will work for some of their usual hours (i.e. part-time) and will be recorded as being on furlough for the remainder of their usual hours during the claim period. For example, an employee who would normally work for 35 hours a week may agree to work for 15 hours a week and will be recorded as furloughed for the other 20 hours.
The furlough scheme was initially extended until 2 December. But the government is now going further so that support can be put in place for long enough to help businesses recover and get back on their feet – as well as giving them the certainty they need in coming months.
Evidence from the first lockdown showed that the economic effects are much longer lasting for businesses than the duration of restrictions.
Can I furlough staff if they have not been furloughed previously?
Yes. As long as they were on the pay roll by 23:59 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.
What do employers have to pay?
There are currently no employer contribution to wages for hours not worked. Employers will only be asked to cover National Insurance and employer pension contributions for hours not worked. For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.
When will we know if this will be extended further?
The CJRS extension was due to be reviewed in January, however a further announcement on 17 December 2020 confirmed that a third extension would see the JRS remain in place until the end of April 2020.