Lockdown and Furlough 2.0

The Coronavirus Job Retention Scheme (Furlough Scheme) has been extended to 31 March 2020. The Government has now published the full guidance relating to the Scheme, which can be accessed here:


The scheme is more generous than it was in September and October. At least until January 2021, the Government will contribute 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. The grant does not cover pension contributions or employers’ National Insurance contributions which the employer must pay. The percentage contribution may be reviewed for February and March.

The key points to note are as follows:

  • To access the scheme an employer does not need to have claimed for an employee before under the previous furlough scheme. To qualify, an employee need only have been on the payroll on 30 October 2020. That means the employee must have appeared on a PAYE RTI submission between 20 March and 30 October 2020.
  • Flexible furloughing continues, i.e. employees can continue to do some work and be furloughed for the hours not worked.
  • There is no minimum period for which an employee must be furloughed but an employer can only claim for periods of at least seven days at a time. There is also no maximum number of employees you can claim for from 1 November.
  • Employees returning from maternity leave need to give the statutory eight weeks’ notice to end maternity leave early in order to be furloughed (and get furlough pay, which will typically be higher than SMP).
  • All employees who appeared on an RTI submission on or before 19 March 2020 will continue to have their reference pay and hours based on the existing furlough calculations as they applied in August 2020 (i.e. the month that the Government ceased to cover employers’ NI and pension contributions). Employees who have been taken on between 20 March and 30 October 2020 will have a different pay/hours reference period. Please refer to the guidance for the full details, but broadly for those on fixed wages the pay is based on 80% of the wages payable in the last pay period ending on or before 30 October 2020. In the case of those on variable wages, it is 80% of the average payable so far this tax year.
  • Normal pay for the purposes of claims is made up of all the payments an employer is obliged to make to an employee. This includes contractual bonuses and overtime payments for example. It should not include discretionary payments such as tips or discretionary bonuses.
  • Employees can be furloughed if they are clinically extremely vulnerable but that does not mean they must be furloughed. Although shielding does not apply as it did during the first wave of the virus, the Government have made clear that the clinically extremely vulnerable should not attend work during the lockdown. They should work from home if possible, or failing that, they can be furloughed if they qualify. If they are ineligible for furlough they can be paid Statutory Sick Pay (SSP).
  • A decision to furlough should not be made simply because an employee will be briefly absent from work, for example for holiday or short-term sickness absence. However, staff may still be furloughed where they happen to be off sick or on holiday if there are legitimate business reasons to do so. Where staff have been furloughed for legitimate business reasons they make take holiday without interrupting furlough.
  • Employees who were made redundant or stopped working after 23 September 2020 (the day before the abortive Job Support Scheme was announced) can be re-employed, furloughed and claimed for. It is up to an employer whether or not to decide to do that.
  • The employer must confirm in writing to the employee that they have been furloughed, and keep a written record of that for five years. Employers can agree retrospectively to furlough someone with effect from 1 November 2020, provided the agreement to retrospectively claim furlough is made on or before 13 November (this Friday).
  • The new guidance states that “the government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.” This means that whilst you will definitely be able to make claims for staff who are serving a period of notice in November, that may change from December onwards. Although this was possible under the old scheme, an employer therefore cannot assume that they will be able to place an employee on furlough for an extended period of notice and be able to continue to claim under the scheme from December onwards.
  • HMRC will publish the names of those employers who have made claims under the scheme for the month of December onwards. This is presumably in order to discourage high profile and profitable companies from making use of the scheme when to do so may not be strictly necessary for them.
  • The Job Support Scheme and the Job Retention Bonus have been put on hold. This is particularly controversial when it comes to the Job Retention Bonus because many employers will have banked on that being payable when deciding whether or not to keep staff on or to make them redundant. Once again the Government has moved the goalposts in that regard.

If you need specific advice on this, please contact Tom Parkes: tparkes@keelys.co.uk

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