Changes to the Coronavirus Job Retention Scheme (CJRS)
Flexible Furloughing
From 1 July 2020 there will be increased flexibility in the CJRS. Employers can bring back employees on a part-time basis with the government continuing to pay 80% of wages for any of their normal hours they do not work.
You can decide the hours and shift patterns that your employees work and while working you pay their wages in full. There will be no minimum time that you can furlough staff for.
Any working hours arrangements that you agree with your employee must cover at least one week and be confirmed to the employee in writing. You will need to:
• Make sure that the agreement is consistent with employment, equality and discrimination laws
• Keep a written record of the agreement for 5 years
You will need to report and claim for a minimum period of one week, although you can choose to make claims for longer periods such as on monthly or two-weekly cycles. When making the claim you must:
• Keep a copy of all records for 6 years, including:
• The amount claimed and claim period for each employee.
– The claim reference number for your records.
– Your calculations in case HMRC need more information about your claim.
– For employees you flexibly furloughed, usual hours worked including any calculations that were required.
– For employees you flexibly furloughed, actual hours worked.
• Tell your employees that you have made a claim and that they do not need to take any more action.
• Pay your employee their wages, if you have not already.
You do not however have to bring people back full time if there is inadequate work for them to do. They can remain on furlough and you can continue to claim the grant for their full hours.
Tapering of the Grant
In June and July the government will continue to pay 80% of wages up to a cap of £2,500 as well as employers NIC and pension contributions. Where employees are working part time this will cover the normal hours the employee doesn’t work.
As of 1 August 2020 government support will taper. Throughout the month of August the government will continue to pay 80% of wages up to a cap of £2,500 but employers will be asked to pay the associated employers NIC and pension contributions for the hours the employee does not work.
In September the government will reduce the payment to 70% of wages up to a cap of £2,187.50 for the hours the employee doesn’t work and employers will have to pay the additional 10% of wages to make wages up to 80% of normal wage in total, capped at £2,500. Employers will also be asked to pay the associated employer’s NIC and pension contributions.
In October the government will reduce the payment to 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay the remaining 20% of salary to make up 80% total up to a cap of £2,500, along with employers NIC and pension contributions.
As previously, employers can choose to top up the salary of furloughed staff to 100% if they wish.
The cap on the furlough grant will be proportional to the hours not worked.
Closure to new entrants from 30 June
The scheme closes 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 at which you can furlough an employee for the first time will be 10 June.
Employers will have until 31 July to make any claims in respect of the period to 30 June.
Employers who have not used the CJRS prior to 30 June will not be eligible to furlough anyone.
From 1 July claim periods will no longer be able to overlap months – due to the fact that moving forward the treatment of subsequent months will be different.
If you need any assistance in calculating or submitting your CJRS claim please get in touch.
