Further Changes Announced for Job Retention Scheme
BY RICK SCHOFIELD , PARTNER , AZETS
TO PROVIDE BUSINESSES WITH SUPPORT DURING THE WINTER MONTHS , THE CHANCELLOR HAS ANNOUNCED THAT THE JOB RETENTION SCHEME ( JRS ) WILL NOW BE EXTENDED THROUGH TO THE END OF MARCH 2021 .
The Government will fund 80 % of employees ’ reference pay for the usual hours that they are unable to work due to the pandemic , capped at £ 2,500 per month .
The scheme is available to all employers within the UK , and employees must have been on the employer ’ s payroll scheme on 30 October 2020 .
Employees who were on the payroll on 23 September 2020 but have since been made redundant can be re-hired and placed on furlough .
Employees can be fully or flexibly furloughed , and employers are able to top-up employees ’ wages if they wish . Employers should evidence furlough arrangements by written agreements .
There is no minimum period an employee must be furloughed for , but claims submitted by employers must cover a minimum of seven consecutive days . Claim periods must start and end within the same calendar month and cannot span more than one month .
Employers are required to pay employees for the hours they work and employers ’ NIC and pension contributions . Employers will also need to pay the employers ’ NIC and pension contributions on the furlough pay claimed .
Reference pay
Employees who were previously furloughed , or on the payroll before 19 March 2020 .
• For employees on a fixed salary , the reference pay is their wages from the last pay period before 19 March 2020 .
• For employees who are paid varied wages , the reference pay is the higher of - the wages from the same calendar period in the 2019 / 2020 tax year , and - the average wages from the 2019 / 2020 tax year .
Employers who previously did not make a JRS claim , or new employees hired since 20 March 2020 .
• For employees on a fixed salary , the reference pay is their wages from the last pay period on or before 30 October 2020 .
• For employees who are paid varied wages , the reference pay is the average pay between the start date of their employment or 6 April 2020 ( whichever is later ) and the day before their furlough period .
Usual hours
Where employees are flexibly furloughed , their usual working hours will need to be identified .
Employees who were previously furloughed , or on the payroll before 19 March 2020 .
• For employees who work fixed hours , their usual hours are those that the employee was contracted for in the last pay period before 19 March 2020 .
• For employees who work varied hours , their usual hours are the higher of - the hours from the same calendar period in the 2019 / 2020 tax year , and - the average hours from the 2019 / 2020 tax year .
Employers who previously did not make a JRS claim , or new employees hired since 20 March 2020 .
• For employees who work fixed hours , their usual hours are those that the employee was contracted for in the last pay period before 30 October 2020 .
• For employees who work varied hours , their usual hours are the average hours between the start date of their employment or 6 April 2020 ( whichever is later ) and the day before their furlough period .
The last date for furlough claims up to 31 October is 30 November 2020 .
Claims from November must be submitted by the 14th of the following month , with claims able to be made from 11 November 2020 .
A review will be carried out of the scheme in January 2021 to consider altering the level of support provided .
Full guidance will be published on 10 November 2020 .
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