Blog - 02/11/2020
Lockdown 2.0 – Furlough Scheme Extended
On 31 October 2020, the Prime Minister, Boris Johnson, announced a further, month-long national lockdown for England in order to combat the effect of the second-wave of the Covid-19 pandemic. It is expected that the national lockdown will last from Thursday 5 November to Wednesday 2 December 2020.
The furlough scheme, or Coronavirus Job Retention Scheme to give its full name, was originally meant to end on 31 October 2020 and be replaced with a new Job Support Scheme (JSS). However, the commencement of the JSS will be postponed until the end of the national lockdown, at which time the existing furlough scheme will end.
The Coronavirus Job Retention Scheme
As mentioned above, the Coronavirus Job Retention Scheme has been extended until the end of the national lockdown, which is expected to last until early December 2020 (the “Extended Furlough Scheme”). The terms of the Furlough Scheme will differ from those which applied towards the end of the existing furlough scheme.
Under the Furlough Scheme which was in force at the end of October 2020, employer contributions were increasing as the scheme was wound down. However the terms of the Extended Furlough Scheme will be similar to those in force from August 2020.
The Extended Furlough Scheme
Under the Extended Furlough Scheme, the Government will contribute 80% of the wages of an employee up to a cap of £2,500 and the employer will pay the employer National Insurance and pension contributions.
Employers will be able to place their employees on ‘flexi-furlough’ which means that employees can work part-time and receive a furlough grant for the hours they did not work.
In order to be eligible for the Extended Furlough Scheme, an employee must have been on their employer’s PAYE payroll before midnight on 30 October 2020.
However, it is currently unclear as to whether employers will be able to re-hire employees to enrol them on the Extended Furlough Scheme. Large numbers of employers made redundancies in anticipation of the end of the existing furlough scheme, but under the original furlough scheme, employers were allowed to re-hire employees who had been made redundant before it was launched and as such, it is possible that the position will remain the same under the Extended Furlough Scheme. We await further guidance.
Furthermore, employers are reminded that any agreement with an employee in relation to placing them on furlough, or extending an existing period of furlough, must be documented in writing, with the employee signifying their agreement to amendment to their terms of employment. Such agreement is then required to be retained by the employer for their records.
Should you have any questions or require any advice in relation to the Extended Furlough Scheme, then please contact Linky Trott or any member of the Employment Team. In the meantime, we will continue to monitor the situation and provide updates as the situation develops.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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