Changes to the Coronavirus Job Retention Scheme – Furlough payments

July 7, 2020
 

On 29th May 2020 the Chancellor announced that the CJRS will close in its current form on 30th June 2020. Flexibility of the scheme came into effect on 1st July 2020 and will close on 31st October 2020.

Employers can bring back to work employees that have been previously furloughed, for reduced hours and still claim furlough for hours not worked. This means that employees can be bought back on a part time basis. Different working patterns/arrangements can be agreed.

The minimum claim period will be one week as opposed to the previous three-week minimum period of furlough.

The employee will be entitled to their normal rate of pay for days worked and the furlough rate for days when they do not work.

The flexible working arrangement must be confirmed in writing to the employee and consent obtained. A copy of this should be kept on file for 6 years.

Closing the scheme to new entrants

The furlough scheme has now closed to new entrants. Employees need to have been furloughed for three weeks prior to the 30th June 2020 meaning that the last date of entry into the scheme was 10th June 2020. After this date employees who have not previously been furloughed will not be eligible for the flexible furlough scheme.

Employer contributions

From 1st August 2020 onward the employer will share the burden of the 80% payment.

  • June and July – The Government will pay 80% up to the limit of £2500 per month PLUS the NICS and Pension contributions.
  • August – The Government will pay 80% up to the limit of £2500. The employer will pay NICS and Pension contributions.
  • September – The Government will pay 70% up to the limit of £2187.50 for hours the employee does not work and spent on furlough. The employer will pay the additional 10% of  furlough payments totalling 80% including NICS and pension contribution.
  • October – The Government will pay 60% up to the limit of £1875 for hour the employee does not work and spent of furlough. The employer will pay the additional 20% of  furlough payments totalling 80% including NICS and pension contribution.

The employees furlough payment must always total 80%.

Calculating furlough

Employers will need to keep a clear record of the number of hours worked, the amount paid to the employee for the hours worked and any additional payments to each employee such as: tips, discretionary bonuses and non-cash payments.

 

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