The JRS was put in place to provide employers whose business had been affected by coronavirus with wage assistance from 1st March 2020. It was originally intended to close on 31st October 2020; however, was extended as a result of the Government’s decision to place England into more severe lockdown measures at the start of November 2020. It was confirmed that the JRS was to be extended, and it will now run until the end of April 2021.
The Job Support Scheme, which was intended to replace the JRS from 1st November 2020, has been postponed indefinitely.
The Government has confirmed that there will be no gap in eligibility for support between the originally intended October end date and the extension into November.
How much is the grant available under the JRS?
The grant is 80% to a maximum of £2,500 per employee per month for unworked hours. Where an employee is on full furlough, this is what they will get per month (unless the employer decides to top up). Where an employee is on flexible furlough, they will be paid in full by the employer for the hours they work and the grant will cover 80% of pay for the unworked hours only, subject to a cap. The cap will always be less than £2,500 because that is the amount which applies to full time furlough which is not the case with flexible furlough.
The level of wage grant had been due for a review at the end of January 2021. However, there will no longer be a January review and on 17th December 2020, the Chancellor confirmed that the JRS will continue to provide cover for 80% of wages, to the stated maximum, until the end of April 2021.
Which employers can use the Scheme?
All employers with a UK bank account and UK PAYE schemes can use the scheme to claim the grant, whether their business is open or closed. Importantly, employers do not need to have used furlough before in order to use the extended scheme. However, all employers will need to meet the eligibility requirements. Even though the extended Scheme was put in place in response to England’s lockdown, it will apply in all areas of the UK.
From February 2021, HMRC will publish the names of employers who have made claims under the JRS for the month of December onwards. The following information will be published:
- the employer name
- an indication of the value of the claim within a banded range
- the company number for companies and Limited Liability Partnerships (LLPs)
The banded ranges are:
- £1 to £10,000
- £10,001 to £25,000
- £25,001 to £50,000
- £50,001 to 100,000
- £100,001 to £250,000
- £250,001 to £500,000
- £500,001 to £1,000,000
- £1,000,001 to £2,500,000
- £2,500,001 to £5,000,000
- £5,000,001 to £10,000,000
- £10,000,001 to £25,000,000
- £25,000,001 to £50,000,000
- £50,000,001 to £100,000,000
- £100,000,001 and above
HMRC will also be improving the information available to furloughed employees by including details of claims made for them, for claim periods starting on or after 1st December 2020 in their Personal Tax Account on GOV.UK.
What situation does my business have to be in to use the scheme?
It does not appear that employees need to be facing redundancy in order for an employer to use the JRS. Guidance says ‘If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), you can furlough employees and apply for a grant…’
The Treasury Direction states, on this topic, ‘The purpose of JRS is to provide for payments to be made to employers on a claim made in respect of them incurring costs of employment in respect of employees who are within the scope of JRS arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus…” and in relation to employees “whose employment activities have been adversely affected by the coronavirus and coronavirus disease or the measures taken to prevent or limit its further transmission.’
What about companies in administration?
Where a company is being taken under the management of an administrator, the administrator can furlough and claim for employees.
Administrators should only use the scheme if there is a reasonable likelihood of retaining the workers. For example, this could be as a result of an administration and pursuit of a sale of the business.
Which employees can be furloughed?
On the payroll
To be eligible to be claimed for under this extension, employees must be on an employer’s PAYE payroll by 23:59 30th October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20th March 2020 and 30th October 2020.
Because of the need to be PAYE, it seems that those under the age of 16 cannot have wages claimed under the Scheme. National Insurance numbers are only issued at the age of 16 so before that point, the child will not generally be considered PAYE.
No previous furlough needed
Employees do not need to have been furloughed before in order to be placed into the JRS during the extension. However, all employees will need to meet the eligibility requirements.
Employees made redundant
If employees were employed by you on 23rd September 2020 and you made a PAYE RTI submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee) and were made redundant or stopped working for you on or after 23rd September 2020, they can also qualify for the scheme if you re-employ them.
If you wish to re-employ staff made redundant, please see expert HR advice.
Fixed term contracts
If the employee’s fixed term contract has not already expired, it can be extended or renewed. You can put the employee on furlough as long as they were employed by you on or before 30th October 2020. You must have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.
An employee who was on a fixed term contract can be re-employed and claimed for if:
- they were employed by you on 23rd September 2020
- their contract expired on or after 23rd September 2020
- you made a PAYE RTI submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.
Employees can be furloughed, if they are unable to work, including 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, 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 10th 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.
The JRS is not intended for short-term sick absences. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees.
Furloughed employees who become ill, due to coronavirus or any other cause, must be paid at least SSP. As under the JRS previously, it is up to employers to decide whether to move these employees onto SSP or to keep them on furlough, at their furloughed rate.
Types of contract
Employees can be on any type of contract. You can claim for office holders (including company directors); salaried member of Limited Liability Partnerships (LLPs); agency workers (including those employed by umbrella companies); limb (b) workers; contingent workers in the public sector, contractors with public sector engagements in scope of IR35 off-payroll working rules.
Foreign nationals are eligible to be furloughed. Grants under the JRS are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.
Where a TUPE has taken place
A new employer is eligible to claim in respect of employees transferred if the TUPE or PAYE business succession rules apply to the change in ownership. The employees being claimed for should have been:
- transferred from their old employer to their new employer on or after 1st September 2020
- employed by either their old employer or new employer on 30th October 2020
- on a PAYE Real Time Information (RTI) submission to HMRC, by their old or new employer between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee.
Returning from family leave
If your employee returns from maternity, shared parental, adoption, paternity or parental bereavement leave and you are claiming in respect of a period that starts on or after 1 November, the normal scheme rules apply.
If your employee decides to end their maternity leave early to enable them to be furloughed (with your agreement), they will need to give you at least 8 weeks’ notice of their return to work and you will not be able to furlough them until the end of the 8 weeks.
Supply teachers are eligible for the scheme in the same way as other employees and can continue to be claimed for during school holiday periods provided that the usual eligibility criteria are met.
Consolidated PAYE schemes
Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme, the new scheme will be eligible to continue to furlough and claim for employees.
Employees with more than one employer
If your employee has more than one employer, they can be furloughed for each job. Each job is separate, and for claims for periods on or before 31 October 2020 – the cap applies to each employer individually.
Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.
If an employee has had multiple employers over the past year, has only worked for one of them at any one time, and is being furloughed by their current employer, their former employer/s should not re-employ them, put them on furlough and claim for their wages through the scheme.
Employees on unpaid leave
The Scheme cannot be used in respect of employees on unpaid leave or unpaid sabbatical.
What kind of part-time working arrangements can be used for flexible furlough?
Guidance confirms that any part-time arrangement, including any amount of time or shift pattern, can be agreed; employers have utmost flexibility to assess what will work for them.
Clearly, flexible furlough will not be an option for employers who have no work to provide to their staff. Such employers may choose to keep their employees on full furlough for as long as they deem necessary subject to the closure of the scheme in its entirety at the end of October 2020.
How long does furlough last?
There is no minimum furlough period. An eligible employee can stay on furlough for as long as the JRS is in operation and they have agreed to it.
Can employers enforce annual leave during furlough?
Yes, employers can require a worker to take annual leave when on furlough. However, if an employer wants to do this, they should “consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday.” Employers should ensure they give twice the notice as the annual leave they require to be taken. For example, for a weeks’ annual leave – 2 weeks’ notice must be given.
Can the employer claim 80% of holiday pay through the scheme?
Can an employee request leave whilst on furlough?
Yes, unless the employer has designated furlough as a time when leave cannot be taken. The employer can refuse the request though, as they normally can.
If you need any help or guidance about the current furlough scheme, please contact us #furlough #cjrs #jobretentionscheme #cjrsextension
(Credit source: CIPD HR-Inform)