What is the Covid-19 Job Retention Scheme?
The Government is incentivising businesses to retain their employees by committing to pay a portion of salary costs of staff where the company’s operations have been severely affected by the coronavirus (Covid-19) crisis.
The Government has agreed to extend the Coronavirus Job Retention Scheme (CJRS) until 30 September 2021.
This Q&A explains how the CJRS Extension will work.
This Q&A page was last updated on 8th March 2021.
1. Eligibility – Employers
Q. Which employers can claim?
A. All employers with a UK bank account and UK Pay As You Earn (PAYE) scheme can claim the grant. You do not need to have previously used the furlough scheme to claim for periods from 1st November 2020.
For new claims from 1st November 2020 onwards, you can claim for employees who were employed on 30th October 2020, as long as you 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.
2. Eligibility – Employees
Q. Which employees are eligible for the extended scheme?
A. The employee must be employed on 30th October 2020
The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March 2020 and 30th October 2020 for that employee
(Note – these rules are subject to variation for fixed term employees and employees you have made redundant. See below)
Q. An employee on PAYE payroll was contracted to begin work for me on 1st November 2020. Can I furlough them even though they only began working for me in November?
A. No – they must be employed by you and on the payroll by the cut-off point of 30th October 2020.
Q. Can I claim for employees on fixed term contracts?
A. Yes. 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.
If the employee’s fixed term contract expired after 23rd September, they can be re-employed and claimed for as long as the other relevant eligibility criteria are met. This applies as long as your employee was employed by you on 23rd September 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.
Q. A fixed term employee’s contract ended before 1st November. Can I re-employ and furlough them?
A. Yes – possibly. If they were employed by you on 23rd September 2020 and all other criteria are met (see above).
Q. I have made employees redundant. Can I re-employ them and furlough them?
A. Yes. Employees that were employed and on the payroll on 23rd September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC from 20th March 2020 to 23rd September 2020, notifying a payment of earnings for those employees.
Similarly, an employee who was on a fixed term contract, on payroll on 23rd September, and that contract expired after 23rd September can be re-employed and claimed for, provided that the other eligibility criteria are met.
Q. Can I give employees notice and continue to furlough them?
A. For claim periods starting on or after 1st December 2020, you cannot claim for any days on or after 1st December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation).
(If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, you will need to make an adjustment in your claim.)
Q. What about employees who have underlying health issues who need to protect themselves or have caring responsibilities for others?
A. If your employee is:
– unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance
– unable to work because they have caring responsibilities resulting from coronavirus (COVID-19), including employees that need to look after children
They are eligible for the grant and can be furloughed.
Q. What if an employee is self-isolating or on sick leave?
A. If your employee is on sick leave or self-isolating as a result of coronavirus, they may be able to get Statutory Sick Pay (SSP). The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness.
Short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee. 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. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee. SSP and the furlough grant cannot be claimed for the same period of absence.
Q. If a freelancer who has had several different employers over the last year asks me to re-employ them, can I do so and put them on furlough?
A. No – 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 should not re-employ them to put them on furlough and claim for their wages through the scheme.
Q. Is there a cap on the number of employees I can claim for?
A. There is no maximum number of employees you can claim for.
Q. What is the closing date of the Scheme?
A. The final closing date is now set to be 30th September 2021. This is the point at which the scheme will shut down.
3. Flexible furloughing
Q. Can furloughed employees continue to do work for me?
Employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. Employers will pay the part-time salary.
Volunteering and training also continues to be permissible.
Q. Can an employee or worker that I furlough look for another job?
A. Yes (see above)
Q. Is it possible to furlough an employee who works for me but also does work for other organisations?
A. Yes. If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually. In addition, employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.
Q. Can employees be moved in and out of furlough status?
A. Yes. There is no minimum furlough period, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
Q. Is there a minimum claim period?
A. Although flexible furlough agreements can last any amount of time, unless otherwise specified in the guidance the period that you claim for must be for a minimum claim period of seven calendar days.
Q. Can someone work one day a week and be furloughed for the rest of it?
A. Yes (see above). But note that during hours which you record your employee as being on furlough, you cannot ask them to do any work for you.
4. Calculating salary
Q. How much of the furloughed employee’s salary can I claim for?
A. Until 30th June 2021, you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. Employers will pay employer national insurance and pension contributions.
From 1st July 2021, the level of grant will be reduced and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.
For the three months 1st July 2021 to 30th September 2021 (the end-date of the scheme), the government will taper its contribution to furlough salary as follows:
– July: The government will pay 70% of wages up to a cap of £2,500. Employers will pay employer national insurance and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
– August: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay employer national insurance and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
– September: The government will pay 60% of wages up to a cap of £1,875. Employers will pay employer national insurance and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
Q. Will deductions such as tax, NI and pension contributions still be deducted from the furloughed employee’s salary payment?
A. Yes, while on furlough, the employees wage will still be subject to Income Tax and National Insurance as usual.
Q. Does employer NI accrue for the furloughed employee payments or will this be covered by grants?
A. This accrues as normal and it is the employers’ responsibility to pay it.
Q. My employee is working for me part-time under the flexible furloughing scheme. How do I work out my employee’s usual hours?
A. If your employee is flexibly furloughed, you will need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period.
The scheme guidance sets this out in detail here.
- 1. Eligibility – Employers
If, after reading our Q&A and the Government’s own guidance (links to which are included within the Q&A) you still have queries, please contact our Senior Business Affairs Executive, Conrad Mewton.
Conrad Mewton Senior Business Affairs ExecutiveSee contact +