CJRS extended until December as new lockdown announced: what does this mean for employers?

The Coronavirus Job Retention Scheme (CJRS) which was due to end on 31 October 2020 has now been extended into December to tie in with the Prime Minister's latest announcement on a new national lockdown (which will start on Thursday 5 November and last until at least Wednesday 2 December – subject to Parliament's approval). The Job Support Scheme (Open and Closed) which was due to come into force on 1 November 2020 has been postponed until the end of the extended CJRS.

What we know about the extension

Some detail is set out in the government's latest statement and indications are that the extended CJRS will operate in much the same way as it has done to date. However, for the purposes of the extension:

• There is no requirement for an employer or employee to have previously used the CJRS.
• To be eligible, employees must be on an employer's PAYE payroll by 23:59 on 30 October 2020; a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made by that date.
• Both full-time and flexible furloughing is permitted. Employers will be able to agree any working arrangements with employees, with the employer paying for working hours as usual and a grant under the CJRS potentially available for hours not worked. Employers will need to report and claim for a minimum period of seven consecutive calendar days.
• Under the extended CJRS, the government will pay 80% of eligible wages for unworked hours, up to a cap of £2,500. However, employers will continue to pay employer National Insurance Contributions (NICs) and pension contributions on these unworked hours. This mirrors how the CJRS operated in August.
• Employers are able to top up an employee's wages above the scheme grant at their own expense if they wish.

Next steps

Clearly, many employers and employees will need to revisit the arrangements currently in place and consider carefully whether support should be claimed under the extended CJRS.  Additional guidance is due to be published and, while it is not expected that the extended CJRS will provide for the financial impact test and other restrictions which were being introduced under the JSS, businesses looking to claim government funds under the CJRS must ensure that they meet all relevant eligibility criteria and carefully consider what funding is appropriate to claim given continuing HMRC scrutiny and the impact on brand.

Given the changing situation, clear communication on working arrangements and financial terms with employees will be critical.  Employers must also remain alert to the difficulties employees may be facing individually, both in and outside of work, particularly with a new lockdown looming. It is also important to ensure that managers are actively supporting employee wellbeing at this uncertain time.