Job Retention Scheme (Furlough) Extended to March 2021

Originally due to end on 31 October, the CJRS will now remain open until 31 March 2021. The scheme had already been extended to December 2020 following the announcement of a new national lockdown for England, but Sunak today told MPs it is clear the economic effects of COVID-19 will be “much longer-lasting” for businesses than the duration of any current restrictions.

For claim periods running ‘through to January 2021’ (so we presume this means all of November and December at least and most probably January too), employees will receive 80% of their usual salary while on furlough, subject to a cap of £2,500. The CJRS extension will be reviewed in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.

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Meanwhile, employers will be asked to continue to cover the costs of employer national insurance and pension contributions for hours not worked. According to the government: “For an average claim, this accounts for just 5% of total employment costs or £70 per employee per month.”

An accompanying policy statement provides more details on some immediate action required. Employers concerned about how to implement changes to working agreements retrospectively can be reassured that as long as they are consistent with employment law, furlough agreements made retrospectively that have effect from 1 November 2020 can support a furlough grant claim. However, these retrospective agreements must be in place on or before 13 November 2020 to be relied on for this purpose.

The government will not pay the Job Retention Bonus in February but, according to an economic factsheet accompanying the latest announcements, will instead redeploy a retention incentive “at the right time”.

The Job Support Scheme, originally due to replace the CJRS on 1 November but superseded by the furlough extension, was not mentioned in Sunak’s speech or the guidance, but could still be revived at a later date.

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The Job Retention Bonus