The Government announced the extension of the Coronavirus Job Retention Scheme (CJRS) just hours before it was due to close on 31 October, as a new national lockdown in England was announced. But how will this affect employers?
The extension of the furlough scheme means that the new Job Support Scheme (JSS), which was due to begin on 1 November, will now be postponed until the CJRS closes.
What support will the CJRS offer now?
The extended CJRS will operate on similar terms to those in place in August 2020. CJRS grants will cover 80 per cent of a furloughed employee’s usual wages, capped at £2,500 a month, while employers will be required to cover employer National Insurance and pension contributions.
They will not be required to contribute to employees’ wages, as had been required in September and October.
What about flexible furlough?
Flexible furlough arrangements will also be permitted under the extended scheme.
This means furloughed employees will be able to work reduced hours, paid by their employer in full, while the employer can claim a CJRS grant in respect of 80 per cent of the pay for usual hours not worked.
What happens now that more businesses will close?
Many employers will be facing the reality of their business closing for the duration of the second lockdown in England, including pubs, restaurants, gyms and non-essential businesses.
For many, key considerations on redundancies and furlough will need to be made in the coming weeks, and with two million employees still on furlough in October, that figure is likely to remain high.
For help and advice, contact our expert Employment Law team today.