Tuesday, November 24, 2020

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.

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.






Latest news

A very unconventional Christmas gift list, but perhaps right for the moment: by James Pinchbeck of Streets Chartered Accountants

James Pinchbeck, Partner at Streets Chartered Accountants, presents gift ideas for business people and employees in the post-Covid world. With Christmas seemingly the only certainty...

Breedon appoints CFO designate

Breedon, the Leicestershire-based construction materials group, has appointed James Brotherton to the executive management team as Chief Financial Officer (CFO) designate. James was CFO of...

Northampton-headquartered automotive specialist secures £750k CBILS support

IN‘n’OUT Autocentres, a group of 27 car garages across the UK, has secured a £750,000 loan from HSBC UK through the Coronavirus Business Interruption...

Global insurance data and technology business moves into new Nottingham home

LexisNexis® Risk Solutions, a provider of data, analytics and technology to insurance providers in the UK and Ireland, has moved into the newly regenerated...

Loughborough awarded £1m to research plastic packaging alternatives

Loughborough University has been awarded around £1m to help tackle waste plastic in the UK. The Perpetual Plastic for Food to Go project (PPFTG) will develop, prototype,...

Related news

10,000 sq ft office development takes step forward in Castle Donington

Clowes Developments’ Paul Shanley has achieved a detailed planning consent for a 10,000 sq ft two storey office block at EMDC, Castle Donington. The build...

A very unconventional Christmas gift list, but perhaps right for the moment: by James Pinchbeck of Streets Chartered Accountants

James Pinchbeck, Partner at Streets Chartered Accountants, presents gift ideas for business people and employees in the post-Covid world. With Christmas seemingly the only certainty...

Breedon appoints CFO designate

Breedon, the Leicestershire-based construction materials group, has appointed James Brotherton to the executive management team as Chief Financial Officer (CFO) designate. James was CFO of...

Northampton-headquartered automotive specialist secures £750k CBILS support

IN‘n’OUT Autocentres, a group of 27 car garages across the UK, has secured a £750,000 loan from HSBC UK through the Coronavirus Business Interruption...

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close