The Job Retention Scheme is back!!
What is the Job Retention Scheme?
So the Job Retention Scheme (JRS) has been extended until 31st March 2021 in light of recent events in the UK and the Government confirming a second national lockdown until 2nd December 2020.
This therefore means that the Job Support Scheme (JSS) has been postponed until a later date and the Job Retention Bonus for businesses has also been postponed. The Job Retention Bonus (JRB) was put in place to act as an incentive to employers to retain employees who they had furloughed and bought back to work and would be paid the bonus in January 2021. However, where the JRS has now been extended, there is no longer a need for this to come into force in January 2021.
The JRS operates in the same way it did back in the first lockdown i.e. individuals can be placed on furlough or flexible furlough. It is very important that if using the furlough scheme in any way, all individuals affected need to be spoken to and letters sent to them agreeing the relevant terms. Placing individuals on furlough is technically a change to their terms and conditions, especially if employers will not be topping up wages to 100% and remaining only at the government funded 80%.
Furlough – how does it work?
Full furlough is a period of time in which an employer is unable to provide any work to an employee. During full lockdown this is likely to affect businesses such as hair salons, beauty salons and some pubs, cafes and restaurants where they’re unable to provide a takeaway service.
Flexible furlough involves a combination of both work and furlough. Employers are likely to use this option when they have not been under instruction from the government to close the business during lockdown but experiencing a reduction in demand i.e. cafes and restaurants that can provide takeaways but with a reduced number of employees required.
Employees can be furloughed where they are unable to work because they:
- are shielding in line with public health guidance (or need to stay at home with someone who is shielding)
- have caring responsibilities resulting from coronavirus, including employees that need to look after children
Employees need to have been on an employers payroll by 30th October 2020 and do not need to have been placed on furlough previously. Employees who were on your payroll on 23rd September 2020 and were either made redundant or stopped working for you afterwards can also be claimed for if an employer re-employs them.
Employers who furlough eligible employees will be able to obtain a grant under the JRS to cover 80% of wage costs for unworked hours, to a maximum of £2,500 per employee per month. This level of grant will apply until the end of January 2021 at which point the scheme will be reviewed.
No wage contribution is needed from the employer when an employee is furloughed. Employers must however deduct and pay to HMRC Income Tax and employee National Insurance contributions on the full amount that they pay the employee.
Annual leave and furlough
With regards to annual leave and furlough, this detail is still to be confirmed, however it is thought to operate in the same way as previously carried out. That is, that annual leave will continue to accrue during furlough and may still be taken (with the employers agreement), however payment for this will need to be paid at 100% as opposed to 80% of normal pay. Employers can request that employees take annual leave during furlough but can also decline requests that they receive.
Work and furlough – what can people do?
As per the original scheme rules, if an individual is on full furlough, no work should be carried out in this time. Issues arose in many organisations such as the recent news with chain restaurant Zizzi, where staff were still expected to work whilst furloughed. This is not accepted and HMRC will be carrying out audits on organisations that do this.
When can claims be made?
Claims under the scheme can be made from 8am on 11th November 2020 and can be made;
- in respect of an employee for a minimum 7 day claim window
- in advance
- in arrears for the period from 1st November 2020 to 11th November 2020, from the week commencing 9th November 2020-11-03
Claims relating to November must be made by 14th December 2020. Claims relating to each subsequent month should be made by 14th of the following month.
Already agreed previous arrangements with employees under the JSS?
If you had already agreed with employees working arrangements under the JSS, you will need to revisit these and have alternative discussions under the JRS. Please also make sure that staff are written to and if you need support with this please get in touch as we have templates for each scenario under the JRS.