Introduction to this document

Letter extending furlough

With the government having extended the Coronavirus Job Retention Scheme (CJRS) until 30 September 2021, if required use our letter to extend furlough for your staff.

Scheme extension

The government has extended the CJRS until 30 September 2021 and it still retains the flexibility which enables employees to be either on full furlough or flexible furlough. In the latter case, the employee works for you on a part-time basis but remains on furlough in relation to their usual hours not worked. You must pay the employee their full pay in the normal way for the hours they actually work (if any) and then under the CJRS they will continue to receive 80% of their usual pay, subject to a gross monthly cap of £2,500, for their furloughed hours. However, until 30 June 2021, the employee’s wages for their furloughed hours were paid by the government by way of a CJRS grant. You only needed to pay employers’ NI and the minimum auto-enrolment employer pension contribution on that reduced subsidised wage. For periods in July 2021, CJRS grants cover 70% of employees’ usual pay for furloughed hours, up to a cap of £2,187.50. In August and September 2021, this is then reduced to 60% of employees’ usual pay for furloughed hours, up to a cap of £1,875. You need to continue to pay your furloughed employees 80% of their usual pay for furloughed hours during this time, up to the £2,500 monthly cap. This means that, for periods between July and September 2021, you need to fund the difference between this and the CJRS grants yourself. Where the employee is flexibly furloughed, the monthly cap is calculated proportional to the hours they are furloughed.

Ongoing furlough requirement

If you originally advised your employees that you anticipated full or flexible furlough would last until a specific end date, once you’ve assessed your business position and taken a decision on whether you need to extend it beyond that date (and for how long), you should write to them confirming this. This is what our Letter Extending Furlough is for. You can continue to use this letter as many times as you need to extend full or flexible furlough while the CJRS still remains in place. The letter confirms the furlough extension and sets out the new anticipated end date for full or flexible furlough but makes clear that date isn’t definitive as it depends on some factors outside your control. It also confirms that the terms of the furlough arrangement remain as you previously advised the employee. However, if the employee has been on full furlough but you now want to extend furlough on a flexible furlough basis instead, i.e. with the employee now returning to work part time, don’t use this letter as you will need to enter into a new flexible furlough agreement with your employee - see our Letter Seeking Agreement to Flexible Furlough.

New consent?

Assuming you originally obtained employees’ written consent to full or flexible furlough (as applicable) and you made clear to them at the time that the anticipated furlough end date wasn’t definitive, and that the furlough may be extended beyond that date, you don’t need to go through the process again of seeking employees’ consent to any further furlough period. That said, do always seek consent if the employee was on full furlough but has returned to work in the meantime (even on flexible furlough) and so this is now to be a new full furlough period, because their original consent to full furlough here will now no longer be valid because of their intervening return to work – see our Letter Seeking Agreement to Full Furlough.