Government publish details of the extended Coronavirus Job Retention Scheme

30 May 2020

Following the announcement by Rishi Sunak at the 5pm briefing on Friday 29 May, guidance together with a fact sheet have been published that explain how the CJRS will operate in the coming months for the one million employers who are furloughing employees and have been claiming grants through the Job Retention Scheme.

Important dates to note

10 June 2020

Final date by which an employer can furlough an employee for the first time (furlough is a minimum period of three weeks)

12 June 2020

Further guidance to be published

30 June 2020

CJRS closed to new entrants

1 July 2020

Only employees who have been furloughed previously, for a period of three weeks, can be claimed for from this date

1 July 2020

Furloughed employees can be brought back to work with CJRS being claimed for the hours not being worked

1 July 2020

Claim periods will be limited to months, no overlapping months will be permitted

1 July 2020

Employers will be able to claim under the new scheme

31 July 2020

Final date for employers to make claims for the period to 30 June 2020

Flexible Furlough

At the moment furlough and the rules of CJRS require the employee to do no work for the employer who is furloughing them. From 1 July the employer and employee can agree to working arrangements and CJRS will continue to fund the non-working time. Claim periods will need to be for a minimum of one week (but can be longer where the pay cycle requires).

Working agreements between the employer and employee, must be confirmed in writing.

The grant claim will be based on hours not worked using the normal hours the employee would work , further guidance will, we hope, explain how this will work where there isn’t a normal working pattern and is due to be published on 12 June.

The employer will need to report the hours that have been worked and what hours the employee would usually be required to work.

Employer contributions and costs

In June and July CJRS will continue to fund the hours not worked up to 80% of wages to a cap of £2,500. From July employers will be required to pay for the hours worked by the employee.

From August  CJRS will continue to fund 80% up to a cap of £2,500 and employers will be required to pay employer NICs and pension costs for the hours not worked, as well as for the hours worked, CJRS will no longer fund the employer on-cost element.

From September CJRS claims will be for 70% of wages, to a cap of £2,187.50, for the hours that the employee does not work. The employer will pay 10% to make up the shortfall to 80% to a cap of £2,500 plus the employer on-costs for NIC and pension.

From October CJRS will fund 60% of wages to a cap of £1,875 for the hours the employee is not required to work, the employer will be expected to contribute 20% to make up the shortfall to 80% to a cap of £2,500 plus the on-costs of employer NIC and pension.

The cap will be proportional to the hours not worked.

As the Chancellor confirmed in his statement “the furlough scheme will remain open all the way until October we will ask employers to start contributing, as we also introduce flexible furloughing and employees will see no change to their level of support”

For full details please read the fact sheet and guidance.

The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus