On 29 May Rishi Sunak announced further details about the extension to the Coronavirus Job Retention Scheme (CJRS). We set out the key details below.
It’s important to note that the CJRS will close to new entrants from 30 June 2020. From this point onwards, you will only be able to furlough employees that you have already 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 2020 for the current three-week furlough period to be completed by 30 June.
Employers will have until 31 July 2020 to make any claims in respect of the period to 30 June.
The CJRS will close on 31 October 2020.
From 1 July 2020, employers will have flexibility to bring previously furloughed employees back to work on a part-time basis. The government will continue to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced, with the aim of getting people back to work.
Employers will be able to decide the hours and shift patterns that employees will work, and will be responsible for paying their wages in full while they are working. This means that employees can work as much or as little as the business needs, with no minimum time limits on the amount of furlough.
To take advantage of this flexibility, any working hours arrangement that an employer agrees with an employee must cover at least one week and be confirmed to the employee in writing.
When an employer claims the government grant for furloughed hours, they will need to report and claim for a minimum period of a week. An employer can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. The employer will be required to submit data on the usual hours an employee would be expected to work in a claim period and the actual hours worked.
Note that if employees are unable to return to work, or the employer has no work for them to do, they can remain entirely furloughed and the employer can continue to claim the grant for their full hours under the existing rules.
From August 2020, the government grant provided to employers through the job retention scheme will be 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 (and cover NI and pension costs on those sums).
- In August, the government will continue to pay 80% of wages up to a cap of £2,500* for the hours the employee does not work, but employers will pay the ER NICs and pension contributions.
- 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*.
*It is important to remember that the cap on the furlough grant will be proportional to the hours not worked.
Note that if you are a smaller employer, some or all of your employer NIC bills may be covered by the Employment Allowance, so the impact of this tapering will not be as great.
Guidance and support
We have been told we can expect further government guidance on how to calculate claims with this extra flexibility by 12 June, and that this will include webinars and detailed online guidance.
To be eligible for ongoing grants under the CJRS, employers must agree arrangements with their staff and confirm those agreements in writing. This means any extensions or arrangements for flexible furloughing will need to be fully documented.
For a link to further information, and an HM Treasury Factsheet, see here: