29 May Extension to COVID-19 Job Retention Scheme
Coronavirus Job Retention Scheme extended, with Employers required to contribute from August.
From 1 July 2020, employers have the flexibility to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.
Employers can decide the hours and shift patterns that the employees will work on their return, and will be responsible for paying their wages in full while for the hours they are working. This means that employees can work as much or as little as the business needs, with no minimum time for furloughing staff.
Any working hours arrangement that agreed with an employee must cover at least one week, and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week. Companies can choose to make claims for longer periods, such as on monthly or two weekly cycles, and will be required to submit data on the usual hours an employee would be expected to work in a claim period, as well as the actual hours worked.
If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.
From August, the government grant provided through the job retention scheme will be slowly tapered.
- in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
- in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
- in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
- in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
- the cap on the furlough grant will be proportional to the hours not worked.
(For smaller employers, some or all of the employer NIC bills will be covered by the Employment Allowance, so these employers should not be significantly impacted by that part of the tapering of the government contribution).
Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.
The scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that have already been furloughed for a full three-week period prior to 30 June.
So the final date that employers can furlough an employee for the first time will be 10 June in order for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
Guidance and Support.
Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12 June, including webinars and detailed online guidance. For information about how to claim, go to GOV.UK and search ‘Coronavirus Job Retention Scheme’.