Extension of Coronavirus Job Retention Scheme: key changes to eligibility rules

Revised guidance published yesterday confirms that the detailed ground rules for the operation of the extended CJRS will remain broadly similar to those of the original Scheme which ended on 31 October. There are however a number of significant differences, which are explained in more detail here. The key points are as follows:

• Employers’ contributions: these have been significantly reduced from the level that applied in October. Until the end of January 2021, employers will only be required to fund employers’ national insurance and pension contributions on the 80% of normal wages paid to employees under the Scheme, though they can top this up to 100% if they wish.
• Employee eligibility: this has been reset, so employees on the payroll as at 30 October will now be eligible. In addition employees made redundant since 23 September can be re-employed and furloughed. The rules for calculating the normal hours and pay of this additional cohort of employees will be adjusted accordingly, but the old rules will continue to apply to employees who were eligible under the original Scheme.
• No cap on employee numbers: the cap that applied for claims under the flexible furlough rules introduced in July has been removed for claims made from 1 November onwards.
• New rules on redundancies on the way: the Government has stated that the rules that allowed the Scheme to be used to fund notice pay of employees under notice of redundancy are being reviewed and will be changed from December. It seems likely that employers will not be able to claim for such employees from next month onwards. However, it is not clear whether there will be any transitional rules to cater for employees who have already been served with redundancy notices, where these expire on or after 1 December.
• Employee consent: the basic rule remains that employees’ consent is required in advance of them being furloughed. However, because the decision to extend the Scheme was made at the last minute, there is a limited window (which expires on 13 November) which allows consent to be backdated for claim periods beginning on or after 1 November.

Note: The guidance was changed on 13 November to make it clear that, from 1 December, employers cannot claim for employees for periods when they are under notice of termination of their employment (for any reason). This has also been confirmed in a new treasury direction covering the extension of the Scheme, issued on 12 November.