The second lockdown: Furlough is back

Following the government’s second lockdown announcement, employers will be able to access increased support to help pay staff wages, as part of the newly extended Coronavirus Job Retention Scheme (CRJS or furlough scheme).

Previously, it was intended that CRJS would be replaced by the Job Support Scheme (or JSS) from 1 November 2020. However, this change will now be delayed until the end of the second lockdown period when the extended furlough scheme is expected to close.

What’s changed?

On 31 October 2020, the government announced that:

  • The Coronavirus Job Retention Scheme (CJRS) will now remain open until December. This extended version will broadly operate as before, with businesses being paid upfront to cover wage costs.
  • One difference from the first furlough scheme that came in at the start of the first lockdown is that both flexible furloughing (part-time working) and full-time furloughing will be allowed.
  • Initially, while HMRC update their systems, businesses will be paid in arrears. The level of grant will mirror levels available under the CJRS in August 2020.
  • The government will pay 80% of wages up to a cap of £2,500 and the grant must be paid to the employee in full.
  • Employers will pay employer National Insurance and pension contributions for the hours the employee does not work.
  • Employees must have been on an employer’s PAYE payroll by 23:59 on 30 October 2020. This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020. Neither the employer nor the employee needs to have previously used the CJRS.
  • Employers may top-up employee wages above the scheme grant at their own expense if they wish.
  • There will be no gap in eligibility for support between the previously announced end date of the CJRS and this extension.

Current CJRS rules will also be carried forward, including the following principles in particular:

  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees.
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS.
  • When claiming the CJRS grant for furloughed hours, 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.
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

Employment law

Without doubt, the extended furlough scheme will have implications for employers and their HR teams; for example, it’s likely that new furlough agreements will need to be put in place and businesses may also want to consider bringing staff back from redundancy. Whilst we can’t advise clients on employment law, we can refer you to our trusted employment law contacts if you require expert advice in this area.

Further guidance and how to claim

For more general details (based on the previous furlough scheme), please see the website here: (last updated 3 November 2020).

For further advice or if you could like help with the claim process itself, then please call us on 01225 325580, email, or contact your usual client director.

Please note that this is only a summary of the main issues and should not be construed as advice. Every effort has been made to ensure factual accuracy at the time of publication (4 November 2020), however, the government response to the Coronavirus situation is changing 24-7, so it should not be relied upon completely.