More furlough – now to the end of March 2021!

Posted on Nov 5, 2020

Rishi Sunak has announced that the furlough scheme will be extended to 31 March 2021. Up to 80% of usual salary will be available for hours not worked, up to a maximum of £2,500 per month, and for the period to 31 January 2021. The percentage may be reviewed for February and March, and (we are speculating) may well reduce as has been the case in September and October.

Full guidance will be published on 10th November 2020, but in the meantime we have a Policy Paper.

The headlines at this stage are:

  1. The scheme is open to employers and employees that had not previously used the Coronavirus Job Retention Scheme (and those that have).
  2. Flexible furlough is still available.
  3. Employees that were employed and on the payroll on 23 September 2020 and then made redundant or stopped working after that date can be re-employed and claimed for. You may find that employees that have been terminated on redundancy grounds since 23 September 2020 will be back in touch seeking re-appointment and furlough.  This is a tricky one to deal with and will be discussed on our next furlough webinar.
  4. The Job Support Scheme and Job Retention Bonus are on hold for the time being. Perhaps they will reappear next year.
  5. Employers will still be asked to cover National Insurance and employer pension contributions for the furlough period.
  6. As before, during hours which employees are recorded as being on furlough, they cannot do any work for their employer that makes money or provides services for their employer or any organisation linked or associated with their employer.
  7. A written agreement must be reached with furloughed employees, and kept for five years.

What we don’t know is whether this new period of furlough will take account of feedback that was offered in relation to the ‘original’ period of furlough. So:

  1. Will employees be able to serve notice during this new period of furlough?
  2. Will there be a ‘viable job’ qualifier for the roles that may furloughed, as was the case under the Job Support Scheme?

While the further extended furlough is welcome, it risks throwing into disarray plans that employers had for managing their workforces over the coming months. Our hope is very much that this scheme will enable employees to remain in work, though our fear is that for many businesses this intervention will be too late.

Webinar to follow shortly where you can have your questions answered by our experts.