Skip to main content
Menu
News
Update: Coronavirus Job Retention Scheme Employment

Update: Coronavirus Job Retention Scheme

15/06/2020

Share

HMRC announced on 12 June 2020, further updates to the official guidance on the Coronavirus Job Retention Scheme (CJRS) and this includes how the CJRS is going to be wound down between July and October.

The updated guidance and announcement confirms that from 1 July 2020, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks. This means that the last date on which employers could have furloughed employees for the first time was 10 June 2020.

The new concept of  ‘flexible furlough’ will be introduced from 1 July 2020, including part-time arrangements. One of the most significant changes is that the minimum furlough period (currently three consecutive weeks) will no longer apply; and these new flexible furlough agreements can now last for any period; and employers will also need to ‘keep a new written agreement’ when implementing flexible furlough. Therefore an employer should ensure that the employee’s consent to any variation of their furlough agreement is obtained in advance of the changes taking effect to ensure that there has been a valid variation of contract.

This effectively means that the employer will have to pay employees in full for hours worked (with CJRS grants remaining available for normal hours not worked). HMRC’s updated guidance includes an example of how to calculate pay for an employee who is placed on “flexible furlough” leave.

In summary:

  • From 1 August 2020, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500.
  • From 1 September 2020, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50).
  • From 1 October 2020, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).

HMRC’s updated guidance also confirms that the 10 June  2020 cut-off for furloughing employees for the first time will not apply to those returning from family-related leave. Employees returning from maternity, adoption, paternity, shared parental or parental bereavement leave can still qualify for the furlough scheme even if they have not previously been furloughed by 10 June 2020, as long as the employer has used the furlough scheme for other eligible employees by that particular date.

For further advice and guidance on this or any employment law related issue, please contact Nick Smith nsmith@mincoffs.co.uk.

 

 

 

 

Back to top