After waiting all day yesterday for the full guidance dealing with the extended furlough scheme, this finally went live early yesterday evening. While we didn’t quite feel the need to burn the midnight oil to read all of this, it has been our first job for this morning. Quite a few of our clients have been undertaking redundancy consultation processes, and the decision to extend furlough at such a late stage has caused a number of practical challenges, not least pending this detail being issued. We are hopeful that we are now in a position where plans can be made and if possible, employees can be supported with confidence.

So, firstly, there is lots and lots of guidance on extended furlough on the HMRC documents page, here (you will need to scroll down). Perhaps the most relevant and immediately applicable documents are:

1. Check which employees you can put on furlough;
2. Check how much you can claim for employees on furlough; and
3. Check if you can claim for your employees’ wages.

As a reminder, the headline terms that apply to the extended furlough are:

1. The scheme will remain open until 31^st March 2021 and covers both full and flexible furlough.
2. From 1^st November to 31^st January 2021 (note this is two months prior to the current expiry date of the scheme) employers can claim 80% of an employee’s usual salary (up from 60% in October and 70% in September), capped at £2,500 per month.
3. Employees may not work while on furlough, as before.
4. Employers will still be required to pay employer NIC and pension contributions in relation to the furlough pay paid.
5. For periods from 1^st November onwards, employers can claim for employees who were employed on 30^th October 2020, as long as they have made a PAYE RTI submission to HMRC between 20^th March 2020 and 30^th October 2020, notifying a payment of earnings for that employee.
6. The scheme will be reviewed in January 2021. We don’t know what that review will include, but there is obviously scope to shift a greater cost burden onto employers.
7. There is no limit on the number of employees that can be claimed for, unlike under the prior scheme which ran to 31^st October.

In addition to these headline terms, there are a few other slightly more detailed points that you should keep in mind, as follows:

1. As before, employees on furlough can be made redundant (keeping in mind the need for general fairness and, where you make redundancies during the furlough period, why you needed to do so).
2. Notice periods and furlough. The guidance states – “The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1^st December 2020, with further guidance published in late November” – it is not clear whether this means that notice served prior to 1^st December but which runs beyond 1^st December will be claimable in full or for the period prior to 1^st December only.
3. If the position is that notice pay is only claimable as furlough to the end of November, then employers must take care placing employees on notice that runs into December and beyond. As a minimum, if there is no PILON clause in the employee’s contract of employment, this could be inserted into the furlough agreement to enable employment to be terminated at the end of November without a breach.
4. Statutory notice pay and statutory redundancy pay should be based on pre-furlough wages.
5. Given the possibility that the 80% contribution rate will change at the end of January, care must be taken in any agreement reached with furloughed employees to ensure that the employer’s obligation will mirror the scheme rules, and is not 80% of usual salary for the duration of the scheme (currently to 31^st March 2021).
6. Where an employer agrees to extend the employment of an otherwise redundant employee for the furlough period, take care to ensure that employment and coverage under the scheme end at the same time.
7. From December 2020 onwards HMRC will publish the names of employers that have made claims under the scheme from December onwards. This will surely lead to the naming and shaming of employers that have claimed under the scheme but which it might be claimed should not have done so.
8. It is possible to retrospectively put in place furlough agreements to have effect from 1^st November, but only where such agreements are in place on or before 13^th November 2020.
9. For employees that are on maternity or adoption leave but who wish to end their leave early to undertake a period of furlough leave, entitlement to furlough leave will only arise at the end of the usual eight week notice period.
10. There is no direct reference to a role being ‘viable’ as a pre-condition to eligibility to entitlement to furlough pay. There is a reference to an employer not being able to maintain their workforce if their operations have been affected by coronavirus, though that is obviously a different and much easier test to meet.
11. As before, all employers should have in place a tailored furlough agreement to record the terms of the furlough leave, and should keep a copy for five years.

We may find that there is further guidance in the coming days and weeks that amends or clarifies these points, and if so we will report further.