Extended Furlough - Coronavirus Job Retention Scheme

Date: Thursday 05 November 2020

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With the country going into the second lockdown on 5 November 2020, and with the suspension of non-essential retail including vehicle showrooms, the government has pushed back the Job Support Scheme and extended the Coronavirus Job Retention Scheme until the end of March 2021.

The terms of the extended Coronavirus Job Retention Scheme and the level of support are similar to the flexible furlough in operation in August 2020, with a few important exceptions: neither the employee nor the employer need to have used the furlough scheme in the past and qualifying employees have to have been on PAYE at some point by 30 October 2020.

The government will cover 80% of the normal wages, capped at £2,500, and the employer will pay the pension and NI contributions.

The furlough is flexible, that is, the employee can work some hours and be furloughed for the remainder of normal hours of work.

The full details of the extended furlough have not been announced yet and are expected by the end of this week. However, time is precious in the current circumstances and delay may be costly.

The second lockdown is scheduled to last four weeks only, with the Prime Minister stating that it will be lifted when this period ends. This does not allow any time for indecision on action to be taken.

A prudent business will consider now which staff can be put on furlough, and so a written agreement will be required. Lawgistics suggest the attached template may be used for the furlough agreement for the time being until full details of the scheme are known. The draft does envisage that changes may be required.

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