Furlough scheme changes: With effect from 1 May

Croner-i Furlough extended

There are some important changes to the Job Retention furlough Scheme (JRS) with effect from 1 May. Croner-i explores the scheme changes and what employers should know about them.

The new eligibility for furlough

For pay periods starting on or after 1 May, employers can now claim for staff who were employed on 2 March. However, this is only if employers made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee.

This is a change from the previous arrangement, where employees were unable to be furloughed if their employment ended on or before 30 October 2020 (also with a PAYE RTI submission made to HMRC between 20 March 2020 and 30 October 2020).

The shift in eligibility from 1 May onwards was confirmed in government guidance on 3 March, after the Spring Budget and as a result of the extension of JRS until the end of September.

The impact of this is that companies will be granted more flexibility in furlough decisions and, as they are now able to furlough those recruited between 31 October 2020 and 2 March 2021, the scope for furloughing staff will be wider.

Companies will also not need to have previously claimed for an employee (before 2 March) to claim for periods starting on or after 1 May.

Calculating claims from 1 May 2021

Due to the change in eligibility highlighted above, the government is due to outline updated guidance on how to calculate furlough pay.

It should be remembered, however, that the government will still provide 80% of furloughed staff wages for the time they are not working in May and June. It is not due to start reducing the amount it provides until 1 July.

Claiming for staff previously made redundant

It is important to note that it will no longer be permissible to claim for employees brought back from redundancy in order to furlough them from 1 May.

In-depth guidance on JRS and employment issues in the transport industry is available as part of a subscription to Transport-inform, which is available at a discount to routeone members.