How does the extended Coronavirus Job Retention Scheme (CJRS) scheme work?

  • The Job Retention Scheme is now extended until 31st March 2021.
  • This is a flexible furlough scheme in line with the current flexi-furlough so some work is allowed. This is paid at normal rates and the balance of contracted time is paid by the CJRS.
  • Employees are entitled to 80% of their qualifying earnings (up to a maximum of £2,500 per month) and this will be in place until at least 31st January 2021 and may then decrease.
  • The deadline for claim periods ending at the end of the month is by the end of the following month, for example 30th November is the last date by which you can claim for pay periods ending on or before 31st October 2020.
  • You can claim for employees from 1 November 2020 who were reported on a RTI submission between 20 March 2020 and 23:59 on 30th October. (Claim periods ending pre 31 October 2020 employees must be eligible under the old rules which means they must have been on a claim up to 30 June).
  • By placing someone on furlough, you are making changes to their contract of employment, so it must be done in writing. The agreement needs to be issued in advance to the employee and retrospective agreements will only be accepted up to 13 November due to delay in the actual guidance. The employee does not need to provide a written response (HR advisors and solicitors DO NOT advise this approach and therefore our recommendation is that the change is accepted by the employee by them signing acceptance whether in writing or via email).  If they refuse the law CURRENTLY is not requiring their acceptance of the terms and cases have already started hitting solicitors desks. On the basis that an agreement could be issued retrospectively and currently there is no excuse for this to happen, I feel that on future HMRC visits, having a signed agreement of the change in employment terms would be strongly advised.
  • You do not need to have used the scheme previously to be able to claim from 1st November and employees do not need to have been claimed for previously under the Version 1 or 2 schemes.
  • From 1st November, Employers pay the Pension and NI for time on Furlough. Therefore this is not cost free for the Employer.
  • There is a fraud reporting line for the JRS as in place previously and a strong emphasis on reporting fraud continues to be evident in the legislation.
  • Slightly different rules apply if an employee has been on statutory parental leave of any sort.
  • You must continue to comply with all employment, equality and discrimination laws.
  • Employees MUST NOT do any work while they are furloughed and while you are claiming CJRS for that period of time, however they are able to undertake training or volunteer. Employees can work for someone else provided this is approved by Employer. You would need to consider any advantage (for example someone getting a full time job and receiving 80% of one full time and 100% on another).
  • Furlough agreements can last for any amount of time until the end of the scheme, but you should specify the terms for clarification. Claim periods work in blocks of 7 calendar days, but the leave itself can last for any period of time, or none at all, within this period.
  • Employee rights continue i.e. SSP, annual leave (paid at 100%), parental rights, unfair dismissal, redundancy etc.
  • You can continue to claim for an employee serving statutory notice, but can’t claim for redundancy payments.  The Government are reviewing whether claims can be made for employees serving notice and have said they will change the approach for claims from 1st December. Guidance will be released later in November.
  • Annual leave continues to accrue in line with the contract of employment. Employees can take holiday whilst on furlough, however employees should not be placed on furlough for a period simply because they are on holiday for that period. If an employee is flexibly furloughed, holiday while they are not working is counted as furloughed hours rather than working hours. Holiday must be paid at the employee’s normal rate.
  • If an employee is on a fixed term contract which has not expired by 1st November, it can be extended and you can put the employee on furlough and claim under the JRS.
  • Anyone that was issued with a Job Support Scheme (Open) or (Closed) agreement that is now going to take part in the JRS Extended will need to have new agreements put in place.
  • Notice pay and redundancy pay should be based on normal salary and not reduced salaries.
  • Anyone that has left can be taken back by the Employer but HR advice MUST be obtained as if returning after redundancy, they will need to have the redundancy process retracted correctly and if the employee left for other reasons, you will still need to put in place a contract of employment or furlough agreement making it clear no obligation for future employment. It is not just a simple case of putting them back on the payroll and paying them. Employers also need to consider the actual impact for them as they will be paying for any employee to return to their employment via pension and employers NIC contributions and if other employees are working 100%, you need to think of the impact on them for someone returning and doing no work for 80% of their pay.
  • From December 2020 HMRC will publish the names of companies (and LLPs) who are using the JRS.

You can find the very latest up-to-date information and advice at

Lisa Greenwood Lambert ChapmanPosted by Lisa Greenwood

Lambert Chapman Chartered Accountants

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