Furlough – the Coronavirus Job Retention Scheme – has been extended until 31 March 2021.

The Job Retention Bonus will not now be paid in February; and the Job Support Scheme has been postponed.

After this blog was written the government extended furlough again, until 30 September 2021. From 1 July employers will be required to contribute towards the costs of unworked hours: find out more here.

Extended furlough scheme - key information for employers

  • UK-wide: The extended furlough scheme will apply throughout the UK.
  • Business open or closed: It can be used whether your business is open or closed.
  • Full or part furlough: Employees can be furloughed for all of their usual hours, or can work part-time and be furloughed for the remainder of their usual hours.
  • Government payment: From 1 November 2020 to 31 January 2021, for unworked hours, the government will pay 80% of employees' wages, capped at £2,500 (with the cap being proportional to hours not worked). The level of government payment will be reviewed in January and may be lower for the period 1 February - 31 March 2021.
  • Employer payment: You will need to pay employees' wages for hours actually worked, and employer national insurance and pension contributions on the full amount paid to the employee (including any scheme grant). Employer contributions may be increased for the period 1 February - 31 March 2021.
  • Top-up: You can top-up employees' wages, but are not obliged to.
  • Used furlough before? You don't need to have used furlough before, and employees don't need to have been furloughed before.
  • Employee eligibility: Employees must have been on your PAYE payroll by 23.59 on 30 October 2020 – you must have made an RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. Employees who were employed and on your payroll on 23 September 2020 and who were made redundant or stopped working for you afterwards can be re-employed and claimed for – you must have made an RTI submission to HMRC from 20 March 2020 to 30 October 2020, notifying a payment of earnings for those employees. You are not, however, obliged to re-employ former employees - contact us if you would like to discuss this.
  • Employees on notice: During November, you can make a furlough claim for an employee who is serving their statutory or contractual notice. For claim periods starting on or after 1 December 2020, you cannot make a furlough claim for any days on or after 1 December 2020 during which a furloughed employee is serving a contractual or statutory notice period for you. This includes people serving notice of retirement or resignation.
  • No minimum furlough period: There is no minimum furlough period, but each claim period must be for at least 7 consecutive days. You can rotate employees on and off furlough.
  • No maximum number of employees: There is no maximum number of employees you can claim for in one claim period.
  • Calculating claims: There is government guidance, including on calculating reference pay and usual hours, here and here.
  • When can we make a claim? Claims can be made from 11 November 2020, but can be made in arrears for the period from 1 November - although see below as regards retrospective written agreements. Claims for November must be made by 14 December 2020.
  • Employer names to be published: HMRC will publish the names of companies and LLPs who make a furlough claim from December onwards.

There is detailed government guidance on extended furlough, and Workbox by Brodies users can access more detailed FAQs via our Coronavirus pages.

Essential: written agreements with employees on furlough

To be eligible for the furlough grant, you must have confirmed to an employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed. 

If an employee has been on furlough since 1 November 2020 without an appropriate written agreement, you can put in place a retrospective furlough agreement to cover the period from 1 November 2020. However:

  • These retrospective agreements must be in place by 13 November 2020;
  • They may be invalid if an employee clearly opposed being placed on furlough in that period (contact us if you want to discuss this); and
  • You won't be able to use retrospective written agreements to cover periods after 13 November - from then, you will need written agreements in place before a furlough period starts.

Furlough agreements must reflect the hours employees actually work and don't work over the period of the agreement, and satisfy the other terms of the furlough scheme. Workbox users can access a template furlough letter via our Coronavirus materials.

The government guidance states that, for the purposes of the furlough grant, employees do not need to provide a written response to your letter putting them on furlough. However, as furlough involves changing employees' terms and conditions, best practice is to get written confirmation that they agree to the changes.

Keep a written record of the agreement for 5 years, and keep records of how many hours employees work, and how many hours they are furloughed, for 6 years.

What about the Job Support Scheme?

The Job Support Scheme was due to replace the furlough scheme from 1 November 2020. Given the furlough extension, the Job Support Scheme has been postponed, at least until the end of March. Indeed, whether the Job Support Scheme will ever take effect is perhaps in doubt.

Job Retention Bonus will no longer be paid

The Job Retention Bonus was intended as an incentive to employers to keep furloughed employees after the end of furlough. It was to be a one-off payment of £1,000 to employers (which did not need to be paid on to employees) in respect of every employee who had been furloughed but remained continuously employed to the end of January 2021.

The UK government has said that it will not pay the Job Retention Bonus in February, as had been planned, but that it will 'instead redeploy a retention incentive at the right time'.

Support for self-employed

Increased support has also been announced for those who are self-employed. You can read more in the government announcement.


Kathleen Morrison

Practice Development Lawyer