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Following the announcement by the Chancellor that the #Coronavirus Job Retention Scheme (“CJRS”) would be extended until October, employers and employees have been waiting on tenterhooks for clarification of the changes which will require #employers to contribute towards #employees subsidised salaries.

Government briefing

On Friday, the big reveal confirmed that employers would be expected to start making some contributions but surprisingly the contributions will have to start being made close to the end of the scheme and are significantly less than expected.

Flexible Furlough

It has been confirmed that from 1 July 2020, employers can ask employees that have previously been furloughed to come back to work for any amount of time and any shift pattern, while still being able to claim the #CJRS grant for their normal hours not worked. 

When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.

Out with the old and in with the new

The current scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June.

Final call for furlough 

The final date by which employers can furlough an employee for the first time will be 10 June, in order for the current 3 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.

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.

August onwards

From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.

Lifeline for many 

So far, the CJRS has helped 1 million employers across the UK furlough 8.4 million jobs, protecting people’s livelihoods.

Flexible furlough facts summarised

The scheme updates mean that the following will apply for the period people are furloughed:

• 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. Employers are not required to pay anything.
• August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
• September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
• October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

What employers need to do

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. Employees who believe they are not getting their 80% share can also report any concerns to the HMRC fraud hotline. HMRC will not hesitate to take action against those found to be abusing the scheme.

The chancellor has said ‘Now, as we begin to re-open our country and kickstart our economy, these schemes will adjust to ensure those who are able to work can do so, while remaining amongst the most generous in the world.’

The information was correct at the time of writing, Updated guidance can be found at https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme.

For further advice on flexible furlough and how to manage the recent changes and implement them please contact a member of our employment team on 020 8363 4444.