On 5 November 2020, the Chancellor announced that the furlough scheme will be extended until the 31 March 2021, with a review to take place in January 2021. This update is based on our current understanding of the rules, as published on 6 November 2020.
In our previous article, we confirmed that the Government was going to extend the Coronavirus Job Retention Scheme ('CJRS') until 2 December 2020, which is the current duration of the national lockdown in England.
However, yesterday the Government announced that, as the impact of lockdown extends beyond the duration of the lockdown itself, the CJRS will be extended until 31 March 2021. Unless otherwise stated, the rules will remain the same as under the previous extension of the CJRS (as covered in our previous article). A review will be carried out in January 2021 to decide whether economic circumstances are improvising to the extent that employers will be asked to contribute more.
Changes to the CJRS
One important point for employers to note is that, for employees who have previously been furloughed, the same calculations for calculating their reference pay and usual hours must continue to be used.
However, for those who have not previously been claimed for under CJRS, the alternative calculations of reference pay and usual hours must be used. Therefore, if someone is being furloughed for the first time starting on or after 1 November 2020, 80% of their wages must be calculated as:
- if they have a fixed salary, 80% of the wages payable in the last pay period ending on or before 30 October 2020
- if their pay varies 80% of the average between (and inclusive of) the start date of their employment, or 6 April 2020 (whichever is later) and the day before their furlough period begins
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
