The Coronavirus Job Retention Scheme (CJRS)

The Chancellor announced on 12 May 2020 that support through the CJRS will continue beyond 30 June to the 31st October. The scheme would be amended to include flexibility and a wind down of the support as the UK re-opens and tries to adapt to the new ‘normal’ with COVID-19. On 29 May, the Chancellor announced some details of the scheme, although some information will not be released until 12 June 2020.

Changes from June 2020

The CJRS will close to new entrants from 30 June and from 1 July, employers will only be able to claim through the scheme for employees that have previously been on furlough for at least a 3-week period prior to 30 June. Therefore, if any business wishes to place an employee on furlough for the first time, their furlough period must start on or before the 10 June. Employers will be able to claim for any employee furloughed in June up until 31 July.

Changes from 1 July 2020

From 1 July, employers will not be able to overlap months when claiming an employee’s furlough payment and the number of employees that are claimed at one time cannot exceed the number of employees of any previous claims.

Employers will be able to bring employees back to work on reduced and/or amended hours and claim furlough for the hours they have not worked. Employers will be responsible for paying employees for the hours they work and this will include tax and NIC on these hours. However, any unworked hours that are within normal contracted hours can be claimed under the CJRS. ‘Flexible furlough’, as it will be called, can be claimed for a minimum period of one week as opposed to the current 3-week minimum timeframe. To implement flexible furlough, employers must consult with employees on the proposed working hours and pattern and confirm any working arrangements in writing. The Government will release further details on flexible furlough on 12 June 2020, including how to calculate claims.

Changes from 1 August 2020 onwards

From August, employers will have to start paying towards the cost of furloughed employees. It will commence with NIC and pension contributions for any hours employees do not work. The CJRS will continue to pay 80% of wages up to a cap of £2,500 per month.

From September, employers will have to pay NIC, pension and 10% of wages. The Government will pay 70% up to a cap of £2,187.50 per month for any unworked hours.

From October, employers will have to pay NIC, pension and 20% of wages. The Government will pay 60% up to a cap of £1,875 per month for any unworked hours.

Until the 31 October, employees must continue to receive 80% of wages if furloughed. The following table summarises this but where an employee takes holiday, the employer will still need to top the payments in the table up to 100% of their pay, as before. Also please note that any hours that are worked by the employee under ‘flexible furlough’ must be paid by the employer.

Employers’ to do list:

1. Review business demand levels and all employees, to consider if any employees not previously furloughed may be required to commence furlough and, if required, consult with these employees to place them on furlough on or before 10 June 2020.
2. Adjust payroll claiming periods to ensure that any claim does not overlap into two months; the timing of your payroll run should be considered.
3. Consider if employees may be able to return to work on limited hours from July, consider workload in different sections of the business and what hours would be required to ensure workload is met. If flexible furlough would be beneficial to the business, ensure to start consulting with employees. However, as full details for flexible furlough are not to be released until 12 June, it is advisable not to confirm any working arrangements until after this date.
4. Ensure a COVID SECURE assessment has been conducted and all employees consulted in readiness to return employees back to work as soon as possible in line with safety and work demands. This involves identifying and addressing any individual concerns as well as more general changes to working practices.
5. Employees expected to return to work must be given adequate notice and they must be informed in writing of work arrangements, their pay, reporting procedures should they have symptoms of Covid-19 and any Health & Safety measures that have been put in place.
6. Training or guidance documents may be required to ensure that all employees are aware of the new ‘normal’ and how this impacts their role and behaviour.