Further to previous announcements, the Treasury has now announced its fourth Direction on the operation of the Coronavirus Job Retention Scheme (CJRS). Furlough was originally supposed to have ended on 31 October 2020, but has now been extended to 31 March 2021. The new Direction sets out how the scheme will operate in its first three months to the end of January 2021.
Key things for employers to note include:
- the CJRS offers a government contribution of 80% of wages (up to a cap of £2,500) for furloughed employees, with employers being required to pay employer NICs and pension contributions. This is effectively a return to the way the scheme operated in August 2020.
- the newly-extended scheme introduces a condition of publicity, in that any employer making a claim under CJRS will have its name published, together with an indication of the amount claimed.
- claims may not be made for a furloughed employee during their notice period. This is a significant change from the way the CJRS operated previously, and is presumed to be a policy decision to deter employers from serving notice to furloughed employees.
Finally, the latest Treasury Direction also withdraws the Job Retention Bonus that would have paid employers £1,000 for each previously-furloughed employee who remained employed at the end of January 2021. Clearly, the extension of furlough supersedes this, and it is unclear whether this will be reinstated at a later stage.
No CJRS claim may be made in respect of an employee if it is abusive or is otherwise contrary to the exceptional purpose of CJRS.