Coronavirus Job Retention Scheme July 2020 Update
The Government issued further guidance on 12 June 2020 in respect of the changes to the Furlough scheme.
The full guidance can be found here.
The updated guidance reflects the Chancellor’s announcement that, from 1 July 2020, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks, meaning that the last date on which employers could furlough employees for the first time was 10 June 2020. However, this cut-off date does not apply to employees returning from maternity, paternity, adoption, shared parental or parental bereavement leave as long as the employer had previously utilised the scheme for other eligible employees by this date.
Employers will be able to implement ‘flexible furlough’ from 1 July 2020, including part-time arrangements, and the minimum furlough period (currently three consecutive weeks) will no longer apply, although any claim through the CJRS portal must be in respect of a minimum one-week period. Employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked. There needs to be a written agreement in place for relevant employees and the employer needs to pay the full normal hourly rate for the hours that are worked.
The furlough scheme grant will cover the unworked hours, subject of course to the eligibility criteria being met. The official guidance provides ‘helpful’ worked examples.
The first time an employer will be able to make claims for days in July will be 1 July 2020. Periods in July cannot be claimed before this point.
Another important date is that 31 July 2020 is the last day that employers can submit claims for periods ending on or before 30 June 2020.
As previously set out, the Government is going to reduce the scheme contribution over the coming months, based on the following. To be eligible for the grant, employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed. Wage caps are proportional to the hours not worked. Employers may continue to top up their employees’ salaries.
• From 1 August, employers will have to pay employer NI contributions and employer pension contributions ongoing for the following months, with the CJRS continuing to pay 80% of wages up to a cap of £2,500.
• From 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50); and
• From 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).
If you would like to discuss further, please contact us by emailing [email protected] or by phoning 01392 247436.
Last updated 15th June 2020