Flexible Furlough – Updates to the Coronavirus Job Retention Scheme
On Friday 29th May 2020 the Government announced changes to the Coronavirus Job Retention Scheme (CJRS), taking place from 1 July 2020. (Otherwise know as CJRS 2.0) Here is all that you need to know.
This scheme is designed that from the 1st July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim 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.
The 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.
This means that the deadline for which an employer can furlough an employee from will be the 10th June 2020.
This is because there is a minimum three week period of furlough under the CJRS 1.0 scheme.
The deadline for making a claim under the old scheme is the 31st July 2020. If we are administering your CJRS claim grant for you. We will endeavour to have all grant claims filed for the 10th July 2020 relating to the 30th June 2020 period.
From the 1st July 2020
The scheme is designed to allow Employers to slowly bring employees back into the workforce and making payment for their earnings whilst the Government will provide a tapered top up (which will reduce between the months of August to October 2020 (where the scheme is set to end on the 31st October 2020)
| Part Time Furloughing | From 1 July, it will be possible to bring employees back to work on a part time basis. This only applies to employees that have been previously furloughed. Employers will be able to claim for the normal hours not worked by the employees.
More details will be released about the calculations for this by central Government on the 12th June 2020. |
| Changes to Grant Funding | Currently, the Government grant covers the 80% of standard furlough calculation paid to the employees plus the employer’s NIC and pension contribution. You can read more about the current rules here and it’s CAP of £2,500 per month.
This is changing as follows: From 1 August 2020 The Government will continue to pay the 80% of the salary paid (capped at £2,500) but will no longer pay the employer’s NIC and pension costs. The employer will pay the employer’s NIC and pension. This will affect very little of our client base. As a practice so far on average – 30% of our clients who have claimed the furlough grant has made a claim to the reimbursement of Employers NIC (national insurance) whilst for the remainder of most clients. They receive the Employment Allowance which covers their national insurance payments. (See below) From 1 September 2020 The Government contribution will reduce to 70% of the salary (capped at £2,187.50). The employer will pay 10% of the salary plus the employer’s NIC and pension. From 1 October The Government contribution will reduce to 60% of the salary (capped at £1,875). The employer will pay 20% of the salary plus the employer’s NIC and pension. The scheme is scheduled to end on 31 October. |
Employers National Insurance
- Around 40% of employers have not made a claim for employer NICs costs or employer pension contributions and so will be unaffected by the change in August if their employee’s employment patterns do not change.
- Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted.
- From 1 July, employers will be able to agree any working arrangements with previously furloughed employees.
- When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week, for grants to be calculated accurately across working patterns.
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