Coronavirus: Job Retention Scheme – Update

  1. COVID-19
  2. Coronavirus: Job Retention Scheme - Update
Coronavirus: Job Retention Scheme – Update..

 

 

On 29 May chancellor Rishi Sunak, announced changes to the rules affecting furlough, more formally known as, the Coronavirus Job Retention Scheme (CJRS). 

 

 

Flexible furloughing

 

From 1‌‌ July 2020, there is the flexibility to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours that they do not work up until the end of August. This flexibility comes a month earlier than previously announced.

 

Employers can decide hours and shift patterns that employees will work on their return, but they will be responsible for paying wages in full while working. This means that employees can work as much or as little as the business needs.

 

Any working hours arrangement agreed with the employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week.

 

Employers can choose to make claims for longer periods such as on monthly or two weekly cycles. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

 

If employees are unable to return to work, or there is no work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

 

 

Employer contributions

 

From August, the government grant provided through the job retention scheme will be slowly tapered.

 

In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work

 

In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed

 

– In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500

 

In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500

 

– The cap on the furlough grant will be proportional to the hours not worked.

 

For smaller employers, some or all of the employer NIC bills will be covered by the Employment Allowance, so there will likely be minimal/no imapct of  that part of the tapering of the government contribution.

 

 

 

Important dates

 

It’s important to note that the scheme will close to new entrants from 30‌‌ June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30‌‌ June.

 

This means that the final date that you can furlough an employee for the first time will be 10‌‌ June for the current three-week furlough period to be completed by 30‌‌ June. Employers will have until 31‌‌ July to make any claims in respect of the period to 30‌‌ June.