Member Article

Four things employers need to know about the furlough scheme extension

Designed to prevent mass redundancies during the COVID-19 pandemic, the Coronavirus Job Retention Scheme (CJRS) is changing from 1 November 2020 and to prepare for this change, here’s what employers need to know.

As set out by the government, the CJRS or ‘furlough’ scheme will continue until the end of October 2020, when the JSS will begin from 1 November and continue for six months to support eligible UK employers that are facing difficulties, to help them retain employees at this time.

From eligibility criteria, to minimum set working hours and reduced government aid, the HR experts at Breedon Consulting have compiled a list of important things that employers need to know about the new scheme.

Managing director of Breedon Consulting, Nicki Robson, said: “This change in government schemes, means it’s decision time for a lot of companies and many are seeking advice and exploring options in order to put plans in place.

“The new support scheme has been confirmed to be in place for six months, but in its original guise it wasn’t as generous as the CJRS scheme and therefore, in some ways employers were forced to make decisions on the future of their businesses and employees. The scheme has since been changed and is now more generous, but the change was only announced around a week before implementation, by which time many businesses had already made plans.

“As a HR firm, we offered free advice from the start of the COVID-19 pandemic back in March and we are now offering free advice again to struggling businesses, highlighting options that may not have been thought of. Creativity is key and options such as sabbaticals and job-sharing arrangements may provide opportunities to retain talent, without the full costs previously associated with that.

“The fact that the scheme has been confirmed for six months, means that employers need to be thinking about formalising some of the arrangements that were previously implemented on an informal basis last time around, such as remote working policies and risk assessments.”

Here are the four things employers need to know about the new furlough scheme extension:

1.Eligibility is changing

Eligibility for the JSS includes any employers with a UK bank account and UK PAYE scheme, as well as all small and medium sized enterprises (SMEs). Large companies can also be eligible to benefit from the scheme, but are required to provide evidence to demonstrate how the business has been adversely affected by COVID-19. The government advice sets out that it expects large employers will not be making capital distributions such as dividends while using this scheme. To qualify, Employees must be on an employer’s PAYE payroll (RTI) by 23 September 2020.

2.Minimum working hours are changing

Whilst the CJRS paid up to £2,500 per worker for normal hours not worked, the new JSS will mean that employees will need to work a minimum of 20% of their usual hours per week. For any unworked, hours, the employee agrees to forfeit one third of the pay for the unworked hours. The remaining two thirds of unworked hours will be topped up by both employer and government contributions; 5% will be topped up by the employer and 61.67% by the Government. This ensures employees on the JSS receive at least 73% of their normal wages, where their usual wages do not exceed the government contribution cap.

3.Government contribution is changing

Any employees set to be moved on to the JSS cannot be on redundancy notice and the government contribution on the new scheme will be capped at £ £1,541.75 per month. Employers will then be reimbursed in arrears for the government contribution. Additional government support is available to businesses that are in tier 3 and are required to close down.

4.There is advice and support out there for businesses

These new changes will raise many questions for businesses and to navigate these new unchartered waters – it’s important that employers seek advice from HR professionals to ensure that eligibility for the scheme is considered and the right options are harnessed to support and safeguard businesses for the future.

Breedon Consulting is offering free 15-minute sessions to non-clients, to offer support regarding the new changes that have been announced. Together with complimentary training and coaching sessions for existing clients to assist managers with the ongoing situation, Breedon has extracted appropriate online learning content to create a package of materials free of charge for ongoing clients, which will be supported by coaching sessions.

This was posted in Bdaily's Members' News section by Tamara Samuel .