News, Blogs & Insights

Furlough Extended Until April 2021: What This Means for Employers

11 November 2020

Following an announcement from the government on 5 November 2020, extra detail on 10 November 2020 and 13 November 2020, the Coronavirus Job Retention Scheme (JRS) – ‘furlough’ – was extended until 31 March 2021. Following an announcement on 17 December 2020, it will now run until 30 April 2021.

If your head is spinning following the various changes in the government’s planned support packages over Autumn 2020, here’s our Q&A guide to explain exactly where we are and how furlough works until March 2021.


There have been a few schemes announced in recent weeks, what is in place now?

Confusion throughout this time can be forgiven due to the many changes seen in support packages available from the government relating to keeping employees in work. The latest announcement confirmed that the JRS will now continue until 30 April 2021. We thought we’d provide a handy Q&A on how furlough works until April 2021. Here’s the timeline so far:

  • The JRS (furlough) ran from March 2020 and was due to end on 31 October 2020
  • The Job Support Scheme (JSS) was then due to begin on 1 November 2020 and run until the end of April 2021
  • The JRS was then extended to 31 March 2021 with the JSS has been delayed. It remains to be seen whether the JSS will ever be brought into effect
  • The JRS was then extended until 30 April 2021, following an announcement from Chancellor Rishi Sunak in December 2020

Is extended furlough different to the previous version and who can be furloughed?

The flexibility of the flexi-furlough arrangements that came into effect in July is the same, so employees can work some of their hours as needed but you can now furlough staff who have not been furloughed before.

You are required to claim for a minimum seven-day period and the cut off dates have changed. If an employee has been on your payroll before midnight on 30 October 2020, then they can be furloughed as long as you have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020. Although this may differ if they have been re-employed after 23 September 2020; more on that later!

It’s important to note that in order to claim under the previous version of furlough (e.g. the arrangements ending on 31 October 2020), submissions must be made by 30 November 2020 at the latest.

How much is an employee on furlough paid? What does my business pay?

Employees who are furloughed can receive 80% of their pay up to a cap of £2,500 per month for the hours they are not working. This is paid for by the government and the employer will just need to pay National Insurance and employer pension contributions. You will need to pay the employee in full for the hours they do work though. For example, an employee who usually works five days per week but is on flexi-furlough and working two days per week would be paid the following: 100% of their wages paid for by the employer for two days they work, and 80% of their wages for the other three days under the rules mentioned above.

Following the extension of the scheme announced in December 2020, the government has confirmed it will continue to pay 80% until the end of April. It was originally the case that the government would review this contribution in January 2021, with employers starting to contribute at that point, but this is no longer the case.

Employers are under no obligation, but they can choose to top up wages of furloughed employees at their own expense.

Can employees carry out work for me during this time?

During the hours which employees are recorded as being on furlough, they cannot work. This means employees should not be doing any work that makes money or provides services for their employer or any organisation linked or associated with their employer. They can however take part in training courses, volunteer for another employer or organisation or even work for another employer if their contract allows them to do that.

Which businesses/employees are eligible to use/be placed on the Job Retention Scheme?

Any business in the UK can access the JRS and employers do not need to have used the JRS previously. Publicly funded organisations are not expected to use the JRS.

Any employee on PAYE on or before 30 October 2020 is eligible to be furloughed – there is no requirement to have furloughed that employee previously.

The government has provided guidance on how the JRS works for company directors with an annual pay period, too. Businesses can only claim in advance if the payroll is ‘imminent’ – so it may be the case that annually paid employees are paid earlier than usual for any time they spend on furlough.

Unlike the previous rules of the JRS, employers can put as many employees on furlough as they need. Previously they could only claim for the number of employers they had claimed for between March and June 2020.

I’ve made staff redundant. What can I do?

You can re-employ employees who have been made redundant if they were employed and on your payroll on 23 September 2020. You can then furlough them making a claim under the JRS. This would also apply to employees who stopped working because their fixed term contract ended. However, you do need to consider what will happen to redundancy payments made, any additional holidays paid as well as any pay in lieu of notice paid. There is also the statutory presumption of continuity of service to be considered too. It is worth getting expert legal advice on this before you take any further steps.

Government guidance confirms that claims cannot be made for any day an employee on furlough is serving either statutory or contractual notice between 1 December 2020 and 31 January 2021. For notice periods for November 2020, the guidance confirms you can still claim statutory notice periods, although it is silent on contractual notice.

I informed my employees we were moving to the Job Support Scheme. What should I do?

The Job Support Scheme will not commence in November 2020. If you now want to utilise the furlough scheme for your employees, you should discuss it with them and obtain their consent to being furloughed, as well as what the arrangement is, e.g. full furlough or flexi-furlough. You will need to let them know how their pay and any benefits will be effected and keep a record of their agreement to being furloughed as well as the hours they work.

The government has confirmed there will be no gap in eligibility between the previous JRS and this extension.

Does an employee have to agree to be placed on furlough?

Yes. Employers need to make sure that they have confirmed with the employee in writing that they have been furloughed. It’s also vital that employers:

  • Make sure any decisions made are consistent with existing employment, equality and discrimination law
  • Keep a written record of the agreements to be furloughed for 5 years
  • Keep records of how many hours employees work and the hours they are furloughed

What about the Job Retention Bonus? Will I still get that in January 2020?

No, the Job Retention Bonus has been removed and employers will no longer be eligible to claim this money. It remains to be seen whether the government reintroduce it at a later date although the government has confirmed a ‘retention incentive’ will be announced at ‘an appropriate time’.

How is the government going to deal with furlough fraud?

From the start of December 2020, HMRC will publish online the names of employers making furlough claims. HMRC will continue to encourage individuals who suspect an employer of breaking furlough rules, to report them.

What information will the government publish if I claim under the furlough scheme?

HMRC must publish information about employers who claim the furlough grant from 1 December 2020 onwards. This will include the Company name (and Company number) and details of the amount claimed, or ‘an amount that gives a reasonable indication of the claim, rather than the exact amount’. This will be published on the website (or anywhere else which HMRC decides) and can remain in the public domain for up to a year.

How can Loch Associates Group help?

Our team of Employment Law Solicitors and HR Consultants are on hand to guide you through and help you manage your staff during this difficult time. Get in touch if you need any assistance.

News, Blogs & Insights

Related Articles

Adams v Edinburgh Rape Crisis Centre (2024)

Adams v Edinburgh Rape Crisis Centre (2024)

In this case, the Employment Tribunal found that Adams, an employee who worked for Edinburgh Rape Crisis Centre (ERCC), had been unlawfully discriminated against and constructively dismissed for her gender-critical beliefs.

read more