Additional guidance on the extended furlough scheme was published on the 10 November.
The scheme has been extended beyond its previous termination date of 31 October 2020 to 31 March 2021. Flexible furlough is retained and the grant is back to 80% (but not NICs and pension contributions) subject to the same limits as before. This might be reviewed in January.
Most of the rules remain the same but there are some new points to note:
You can agree retrospectively to furlough someone with effect from 1 November 2020, provided the agreement to claim furlough retrospectively is done on or before this Friday, 13 November. If you miss the deadline, you can only claim for a period after agreement is reached.
You can claim for employees employed on 30 October 2020, provided a RTI PAYE return had been made for them by that date (extending the class of employees eligible – you might be able to furlough recent joiners who were previously not eligible) but see also next point. (If you are currently in a redundancy consultation, you should consider furlough as an alternative to dismissal.)
There is a different rule if you want to re-hire an ex-employee and furlough them. You can, if you wish to (but you are not obliged), re-employ anyone you've made redundant and furlough them provided they were still employed and were on your payroll on 23 September 2020. This also applies to anyone you engaged on a fixed term contract on that date which expired afterwards (provided that the other eligibility criteria are met).
There must be a written agreement which is kept for at least 5 years.
There is now no limit on the number of employees you can furlough.
Also: “From December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards.” It is unclear whether this is intended to “name and shame” or to enable employees to check whether their employer is making a claim and possibly notify HMRC if they suspect fraud, or possibly both.
EMPLOYEES SERVING NOTICE
There is some alarming new wording about the furlough grant where an employee is serving notice.
Up to now, the scheme has allowed you to claim the furlough grant to cover a notice period being served (but not if the employee is paid in lieu of notice or for redundancy compensation).
For employees with normal working hours, if the calculation date for statutory redundancy pay or statutory notice pay fell on or before 31 October 2020, the amount payable is based on full pay. This also applies to contractual notice, if this is not at least one week more than statutory minimum notice (which is one week per complete year of service to a maximum of 12).
The guidance now says: “You can continue to claim for a furloughed employee who is serving a statutory notice period, however grants cannot be used to substitute redundancy payments. The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November. If you make an employee redundant, you should base statutory redundancy and statutory notice pay on their normal wage rather than the reduced furlough wage.
It looks like the government is intending to prohibit claims for employees serving notice.
This is presumably to make it more expensive to dismiss people and hence hopefully persuade employers to keep them.
But is it not clear whether this means only for employees who are given notice on or after 1 December or covers those already given notice. The wording says for claims periods from 1 December, starting with that date which could cover employees who have been given notice already.
The common sense interpretation of the wording surely means that employers can claim for those served with notice before the 1 December but probably not for those served with notice on or after the 1 December.
Further guidance is promised in late November – not very helpful at the moment.
Please be aware that he above is based on current guidance which could be extended, clarified or changed at any time.
The guidance notes are available through https://www.gov.uk/government/collections/coronavirus-job-retention-scheme. The existing notes have been updated.