COVID-19: How will the extension of the Coronavirus Job Retention Scheme affect employers?

The Government has announced that the Coronavirus Job Retention Scheme (CJRS) will be extended until March 2021, with a review of the scheme in January 2021.

With new national lockdown measures coming into force in England on Thursday 5 November, the Government initially announced the extension of the CJRS, or Furlough Scheme, until December.

However, the Chancellor, Rishi Sunak, subsequently announced an extension of the scheme until March 2021 for the whole of the UK.

The extension of the furlough scheme means that the new Job Support Scheme (JSS), which was due to begin on 1 November, will now be postponed until the CJRS closes.

What support will the CJRS offer now?

The extended CJRS will operate on similar terms to those in place in August 2020. CJRS grants will cover 80 per cent of a furloughed employee’s usual wages, capped at £2,500 a month, while employers will be required to cover employer National Insurance and pension contributions.

They will not be required to contribute to employees’ wages, as had been required in September and October.

What about flexible furlough?

Flexible furlough arrangements will also be permitted under the extended scheme.

This means furloughed employees will be able to work reduced hours, paid by their employer in full, while the employer can claim a CJRS grant in respect of 80 per cent of the pay for usual hours not worked.

It has also been announced that the Job Retention bonus has been postponed indefinitely, with the Government expected to review the scheme when they look to bring the CJRS to a conclusion in Spring 2021.

What happens now that more businesses will close?

Many employers will be facing the reality of their business closing for the duration of the second lockdown in England, including pubs, restaurants, gyms and non-essential businesses.

For many, key considerations on redundancies and furlough will need to be made over the next few months and with two million employees still on furlough in October, that figure is likely to remain high.

At AGS HR, we can advise on all aspects of the challenges you may face, such as returning to work, reviewing employment contracts and redundancy considerations, with easy to use documents and practical advice.

For help and advice, contact our expert team at AGS HR Solutions today to discuss your requirements.