On Friday 29th May 2020, the Government announced further changes to the Coronavirus Job Retention Scheme (CJRS) of which have been detailed below.
The CJRS will close to new entrants to the scheme from 30 June 2020. Therefore the after this point employers will only be able to furlough employees if they have previously been furloughed for a full 3-week period.
Therefore the final date an employer can furlough an employee for the first time will be 10 June 2020.
From 1 July 2020 we will see the introduction of ‘Flexible Furloughing’
Employers will be able to bring employees back to work on a part-time basis. The time employees are at home will be funded through the furlough scheme, while the time they are at work will need to be paid by the employer at their normal 100% pay rate.
For example, if someone normally works five days a week, they could be furloughed two days a week and be at work three days a week. For the two days they are at home, they will be paid at 80%, reclaimable from the Government through the Scheme. For the three days they are at work, they will be paid in full, funded entirely by the employer.
Employers will need to submit information through the HMRC portal outlining how many hours the employee would normally be expected to work and the actual hours they have worked, so that the correct amount of funding can be claimed.
More details about how flexible furlough will work are going to be provided on 12 June.
Furlough scheme is set to stop at the end of October and will gradually be phased out as set out below:
From July, employers will have to pay employees for the hours they work at 100% if they return to work, for hours furloughed will be able to claim through CJRS and the Government will pay 80% of wages, up to a cap of £2,500 per month (gross) and claim employer NICS and pension contributions.
- In August, the level of the grant will slowly be reduced to reflect that people will be returning to work. The Government will pay 80% of wages, up to a cap of £2,500 per month (gross) however, employers will be responsible for employer NICS and pension contributions.
- In September, the Government will pay 70% of wages, up to a cap of £2,187.50 per month (gross) for the hours the employee does not work. Employers will pay employer NICs and pension contributions, in addition to 10% of wages (to make up to 80%) up to a cap of £2,500 per month (gross).
- In October, the Government will pay 60% of wages, up to a cap of £1,875 per month (gross) for the hours the employee does not work. Employers will pay NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
The CJRS is due to end on 31 October 2020.
If you need further advice or support on the CJRS or otherwise, then please do not hesitate to get in touch.