UK Extends Coronavirus Job Retention Scheme, Postpones Job Support Scheme Due to Second Lockdown in England

Prime Minister Boris Johnson announced in a press conference on 31 October 2020, that new national lockdown restrictions would apply in England from 12:01 a.m. on 5 November 2020, until at least 2 December 2020.

In conjunction with these new measures, the  Chancellor of the Exchequer Rishi Sunak announced in the House of Commons on 5 November 2020, that the Coronavirus Job Retention Scheme (CJRS), would be further extended to remain open to employers until the end of March 2021, (it was originally to be extended to December 2020 only). This will apply to the whole of the United Kingdom, despite differential restrictions in each nation. The government expects to review this extension in January 2021.The Job Support Scheme, which was scheduled to run from 1 November 2020, has been postponed until this extended CJRS ends.

The following eligibility criteria apply to employers claiming CJRS grants and to employees who may be “claimed for under [the] extension.”

Employers

• must have UK bank accounts and UK Pay As You Earn (PAYE) schemes;
• need not have used the CJRS previously; and
• are not expected to use the scheme if they are wholly publicly funded organisations.

Employees

• must have been on an employer’s PAYE payroll by 11:59 p.m. on 30 October 2020 (which means a Real Time Information [RTI] submission notifying payment for each eligible employee to Her Majesty’s Revenue and Customs must have been made between 20 March 2020 and 30 October 2020);
• can be on any type of contract; and
• must be furloughed for a minimum of seven consecutive calendar days.

Under the scheme, the government will pay 80 percent of an employee’s current salary for hours not worked, up to a maximum of £2,500. This is an increase from the “tapered-down” version of the scheme that was running at 60 percent in October 2020. As before, employers will pay National Insurance Contributions and pension contributions and may “choose to top up employee wages above the scheme grant at their own expense if they wish.”

The calculations for hours not worked by employees will follow a similar methodology as the current CJRS, and flexible furloughing for a minimum of seven consecutive days remains an option.

Employers can make claims regarding employee wage costs from 8 a.m. on 11 November 2020.

Further guidance is expected to be published on 10 November 2020. As under the previous CJRS, employers will be permitted to rehire employees who have been made redundant and place them on furlough leave if employees were on an organisation’s payroll on 23 September 2020, as long as the employer made an RTI submission for the employees.

Furthermore, the Jobs Retention Bonus will not be paid in February as the CJRS has been extended. It is anticipated the government will “redeploy a retention incentive at the appropriate time.”

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar programs.