Furlough Scheme Extended to 30th April 2021
Employers and employees who feared redundancies may be on the horizon will welcome the recent announcement that the Coronavirus Job Retention Scheme (CJRS) has been extended once again until the 30th April 2021. To implement that extension, the Treasury has issued a new Direction which shall apply from 1st February 2021 until 30th April 2021.
Much of the terms of the CJRS remain the same, as employers can continue to claim 80% of an employee’s salary up to a maximum of £2,500 per calendar month for hours not worked. Flexible furlough is still an option, meaning employees can work part-time and receive a furlough grant for their unworked hours. Employers remain liable for national insurance contributions and employer auto-enrolment pension contributions on employees’ furlough pay.
Where an employees’ pay changes month to month, and that employee was eligible for furlough under the original CJRS scheme, employers will need to refer to the higher of the employee’s wages in the corresponding calendar period in tax year 2019 to 2020, or the average wages payable in the tax year 2019 to 2020 to calculate their “usual wages”; this is whether or not the employee was on furlough. For new joiners after 19 March 2020, employers should refer to the average wage between the later of the employee’s start date or 6 April 2020 and the day before their period of extended furlough begins.
For further information or guidance please contact Sorcha Monaghan from our Employment Team.