Third National Lockdown – What Does It Mean For Employers?

Employers who wish to do so can still access the Coronavirus Job Retention Scheme (CJRS) or ‘furlough scheme’ – which was originally due to end on 31st October but was extended until the end of April 2021 – throughout the third national lockdown.

Below, we have outlined how the CJRS will operate during lockdown three.

The CJRS and lockdown three

The CJRS was first introduced to the UK on 23rd March 2020 with the aim of providing support to employers whose operations had been severely affected by the coronavirus pandemic. It enabled employers to recover 80% of wage costs for employees placed on furlough – up to a monthly limit of £2,500 per employee.

It was an entirely new concept and introduced a new type of temporary leave for employees, where the Government reimbursed the employer for wage costs instead of staff being made redundant.

From 1st November, the level of financial support available to businesses under the extended CJRS is the same that was available under the furlough scheme in August, e.g. the Government pays 80% of wages and employers pay National Insurance contributions (NICs) and pension contributions.

The extended CJRS is available regardless of whether the employer or employee has previously used the furlough scheme and covers staff who were on the employer’s PAYE payroll at 11:59pm on Friday 30th October.

What are the rules of the extended CJRS?

There are a number of measures and requirements business owners need to be aware of, including:

• Businesses can claim in respect of the hours that their employees are not working.
• Employers can claim for a minimum period of seven consecutive calendar days.
• For hours not worked, the Government will pay 80% of wages.
• For worked hours, employers must pay their employees as normal.
• As previously under the CJRS, employers can choose to top-up their employees’ wages at their own expense.
• All employers are eligible to claim as long as they have a PAYE payroll scheme, enrolled for PAYE online and a UK bank account.
• All employees paid via PAYE can be furloughed as long as they were on the payroll at 11:59pm on 30th October 2020 and on any type of contract – including apprentices, full-time, part-time and zero hours.
• Employees on fixed term contracts and individuals who are not employees but paid via PAYE (i.e. company directors or agency workers) can also be furloughed.

The Government will confirm when claims under the extended CJRS can be made. There will be no gap in eligibility for support between the previously announced end-date of furlough leave and this extension.

What about flexible furlough?

The Government introduced a more flexible form of furlough on 1st July, whereby employers could agree more flexible working arrangements with furloughed employees. For example, employers and employees could agree a return to work on a part-time basis to suit the needs of the business.

Under flexible furlough, employers were required to pay employees in full for any time spent working and would be responsible for tax and NICs on those payments.

Employers could not reclaim under the CJRS for payments made in respect of time spent working but could reclaim under the CJRS for employees’ ‘normal’ hours that weren’t worked.

When claiming under the CJRS, employers have to report on hours worked and the usual hours an employee was expected to work in a claim period.

Can employees who have childcare issues in light of school closures be furloughed?

Yes, employees can be furloughed if both the employer and employee agree in these circumstances.

What about shielding employees?

Employees who are clinically extremely vulnerable and who are required to shield can be furloughed. Again, this is by agreement if they cannot undertake their work from home.