Coronavirus Job Retention Scheme Update (CJRS) 03/06/2020
The Chancellor has announced further details of the changes he is making to the CJRS in order to achieve 2 aims:
- Tapering the financial support available towards the scheme’s closure date of 31 October 2020.
- Providing for ‘part-time’ furloughing from 1 July so that employees can be brought back from furlough on a gradual basis.
To facilitate the part-time furlough arrangement – which he is bringing in one month earlier than previously expected – there is a critical and early date for employers to bear in mind – 10 June 2020. 10 June is the date by when anyone for whom you want to make continuing furlough claims from 1 July will need to be furloughed. This clearly does not give employers long to decide – particularly if you have not made use of the scheme yet or there are employees you still plan to furlough, or where you have been rotating staff through the scheme. Another key date is 31 July, because by then all claims for the period to 30 June will need to have been made. The government is clearly wanting to draw a line under that period, before the new phase starts.
The new phase also includes the gradual introduction of contributions required from employers, namely:
- To 30 June– claims can be made as normal.
- July – claims to be paid in full, although there will be changes to reporting requirements necessitated by the flexible hours scheme.
- From 1 August until the end of the scheme on 31 October 2020- employer NI and pension contributions can no longer be claimed.
- From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work; but employers are still required to pay 80% of wages up to a cap of £2,500 per month.
- From 1 October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work; but employers are still required to pay 80% of wages up to a cap of £2,500 per month.
- The cap on the furlough grant will be proportionate to the hours not worked, under the new flexible scheme.
Under the part time arrangements, any agreements with employees for part time working must cover at least one week. The minimum claim period also reduces to 1 week and there will be specific reporting required for the part time hours.
Therefore effected members should:
- Reconsider / plan for your furlough requirements and get any ‘first time furloughees’ under furlough by 10 June 2020.
- Ensure the most appropriate employees are furloughed by 10 June, i.e. most suited to being brought back part time.
- Plan for how you will use the option for part time furlough from 1 July and make necessary adjustments to your furlough agreements with furloughed employees.
- Consider the cost implications from 1 August and factor that in to your financial forecasts for the coming months.
- Seek advice in the event you anticipate needing to make permanent changes to your working arrangements or headcount going forward.