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Coronavirus job retention scheme: Key things an employer needs to know

The UK’s Coronavirus Job Retention Scheme (CJRS), or furlough scheme as it has been colloquially known, has been extended until the end of April 2021.
So, what do you really need to know?

1. You can fully furlough employees with their agreement, this means they do not work and receive the 80% of salary up to the cap of £2500 per month.

2. You can use the scheme on a flexible basis. Employees can work for any amount of time, and any work pattern and claim the grant for the furloughed hours, with reference to hours the employee would usually have worked in that period.

3. For both full and flexible furlough agreements, the period claimed for must be for a minimum of 7 consecutive calendar days in any period.

4. Any employee being placed on furlough must have been on the payroll from the 30th October 2020. (The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee)

5. Employees do not need to have been furloughed under the CJRS previously.

6. An employee needs to agree to being placed on furlough leave, this must be recorded on a signed agreement and stored on their personal file for 5 years.

7. If an employee has agreed to being placed on furlough leave and has accrued untaken holiday, this will be payable at 100% of salary (80% furlough and 20% top up by Company)

8. 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.

9. The CJRS is not intended for short-term sick absences. If, however, unless you need to use furlough for business reasons and they are currently off sick, they we are eligible to do so, as with other employees.

Something you should be aware of with the extension scheme, is that HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December. This could result in negative PR if the scheme has not been used as it has been intentionally designed for.

This summary is for guidance purposes only. Each individual matter should be considered on its own merit and advice taken where needed. Contact us with your queries.