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Furlough Extended: What are the rules?

As you may be aware, on Saturday 31st October 2020 the UK government announced that, in light of the new lockdown being introduced in England, the furlough scheme is being extended for a further month and will now end in December 2020. This means that the Job Support Scheme previously announced will be postponed and come into effect once the extended furlough ends.

Although the furlough extension is because of the lockdown in England, the scheme will continue to apply UK wide. Furlough will continue to operate in the same manner, but with some significant changes for the extended period, as follows:

  • The amount of support for wages will revert to the position in August, meaning employers will be able to claim 80% of wages for furloughed employees (up to a cap of £2,500 per month) and only have to contribute by paying employer NICs and pension contributions. Flexible furlough will still be permitted.
  • The extended scheme can be used by employers and employees who have not used the furlough scheme before. This means employees can be furloughed during November even if they have not been furloughed before. However, the employee must have been on the employer’s PAYE payroll by 23:59 on 30th October 2020 – this means that a submission for payment for that employee must have been made to HMRC on or before 30th This means the scheme may cover it employees it would not have before, but this cut off may mean new employees again miss out.

It is intended that the extension of the scheme will continue to operate in the same way in that businesses will be paid upfront to cover wage costs. The government has indicated that there will be a short period where the system will require to be updated, therefore some portion of claims will be paid in arrears, with this most likely affecting claims for weekly paid employees.

Broadly, aside from the changes above, it appears the scheme will continue to operate as before. See our previous blog for details. As a brief reminder:

  • Employees on any type of contract can be furloughed;
  • Employers can claim 80% of wages for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. If employees are on flexible furlough the employers must pay them for the hours they do work.
  • When claiming, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  • An employee must not be required to work for any period they are furloughed.
  • There must be agreement with an employee to be furloughed and written notice provided to them, which must be retained by the employer for five years. It should also be ensured that any changes in working hours are made in accordance with the employment contract.

The Government guidance indicates it will confirm shortly when claims can be made in respect of November, but notes there will be no gap in eligibility for support between the previously announced end-date of the scheme and the extension. Therefore, employees can remain on furlough or now be furloughed if an employer wishes to make continued to use of the scheme.

The previously announced Job Support Scheme (both the JSS Open and JSS Closed) are intended to come into effect in December once the extended furlough period ends. However, given the ongoing uncertainty and ever changing measures it place it remains to be seen whether this proceeds, or whether the ongoing support available takes a different form.