Here are the key points you need to know:

  1. The new furlough Scheme (“the Scheme”) begins on 1 November 2020 (including for businesses legally closed before 1 November) and will be available for six months with a review point in January.
  2. It applies to any business required to close its premises due to local or national restrictions in relation to employees who cannot work (paid or unpaid) for that employer. 
  3. It does not apply where a local public health authority closes a business due to a workplace outbreak of Covid-19.
  4. These new measures will sit alongside the original Job Support Scheme, which is designed to support businesses that are facing low demand over the winter months – and the £1,000 Job Retention Bonus (JRB) which encourages employers to keep staff on payroll.  Grants under the Scheme can be used to help meet the JRB Minimum Income Threshold.
  5. Employers who have not already used the previous scheme are eligible as well as those who have. 
  6. The government will pay two thirds of their employees’ salaries, up to a maximum of £2,100 per month.
  7. Employers will not be required to contribute towards wages and will only be asked to cover NICS and pension contributions.
  8. Employers can top up employee pay if they wish.
  9. Payments will be made in arrears via a HMRC claims service that will be available from early December.
  10. Employees must be off work for a minimum of seven consecutive days.
  11. Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
  12. Employers must agree the new scheme with the relevant staff, make any changes to the employment contract by agreement, and notify the employee in writing.  This variation agreement must be made available to HMRC on request.
  13. Large employers using the Scheme are not expected to make dividend payments, share buy backs or similar payments during the Scheme.

Contact us

If you have any questions about these issues in relation to your own organisation, please contact a member of the team or speak with your usual Fox Williams contact. This article was written by Jane MannJessica Ambrose & Olwen Mair.

Articles and commentary by our legal experts on the impact of Covid-19 are all available here.

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