Another Friday during lockdown means another update on the furlough scheme! As we had anticipated, Rishi Sunak announced increased flexibility to the coronavirus job retention scheme (CJRS) over the next few months.
From 1st July 2020, employers will be able to bring furloughed employees back to work on a part time basis. The government will continue to pay 80% of the employees’ wages for their normal hours that the employee does not work up until August.
This will be great news for a lot of employers, as some employers had some work for employees to carry out, but not enough to bring them back full time.
Deadline for furloughing staff
From 30th June 2020, the scheme will not be open for new entrants, and employers can only benefit from the scheme onwards if they have furloughed employees for the full 3 weeks period prior to 30th June 2020.
The final date that you can furlough an employee for the first time is therefore 10th June 2020 in order for the 3-week furlough period to be completed by 30th June 2020.
Employers will have until 31st July to make any claims for the period up to the 30th June 2020.
Phased return to work
If you are planning to bring your employees back part time from furlough from July, you will:
- be able to decide on their hours that they work and the shift pattern that they work;
- have to pay their wages and cannot claim this from the government;
- have to agree (and not impose) any working arrangements with your employee in writing and this arrangement must cover at least 1 week.
There will be no minimum period of time (currently 3 weeks) that you have to furlough staff for either.
When you are making your claim for a grant under the CJRS, you must:
- Report and claim for a minimum period of 1 week;
- If you decide to make a claim for a longer period of time such as a fortnightly or monthly cycle, you can do so;
- You will be asked to submit data which details the usual hours an employee would be expected to work in the period that you have claimed and also confirm the hours that they have actually worked so you must keep records of this information.
If your employees are unable to return to work, or there is not enough work for them to do, they can still be placed on furlough in line with the existing rules in place.
Sunak outlined the phasing out provisions for the CJRS as follows:
June and July
The government will continue to pay 80% of employee’s wages for those that are furloughed (up to the £2,500 pcm cap). The government will also continue to pay the national insurance contribution and pension contributions for the hours that the employee does not work.
If an employee does work, then the employer will have to pay the employee for the hours that they have worked.
August
The government will continue to pay 80% of employee wages up to the £2,500 cap, but employers will have to pay national insurance contributions and pension contribution costs. On average, this would be around 5% of the gross employment costs that would have been incurred if the employee was not furloughed.
September
The government will pay 70% of employee’s wages, up to a cap of £2,187.50, for the hours that an employee does not work. Employers will have to pay their national insurance and pension contributions and an additional 10% to make up to 80% of the £2,500 cap.
October
From October, the government will pay 60% of employee wages, up to a cap of £1,875, for the hours that an employee does not work. Employers will have to pay their national insurance and pension contributions and an additional 20% to make up to 80% of the £2,500 cap.
So, if you are currently contemplating designating some of your staff as furloughed who have not been furloughed previously, you must act before 10th June 2020.