Following the recent announcement by the Chancellor that the Coronavirus Job Retention Scheme (CJRS) will be wound down from July, through to its complete closure on 31 October 2020, the Government has updated the official guidance to provide details of how this will take effect.
The deadline for furloughing an employee for the first time was 10 June. This means that, from 1 July, employers can only furlough employees who have already been furloughed for the minimum period of three weeks. Also from 1 July, the minimum furlough period of three consecutive weeks will no longer apply and furlough can last for any length of time although any claim through the CJRS portal must be in respect of a minimum one week period. Referred to as ‘flexible furlough’, this will allow employers to apply part-time arrangements under which employees can move fluidly between periods of work and furlough.
According to the updated guidance, any new arrangement made between an employer and employee regarding flexible furlough must be formalised in a new written agreement between them. Under flexible furlough, employers must pay employees in full for the hours worked and CJRS grants will remain available to cover the normal hours not worked. The updated guidance explains how pay should be calculated for a flexibly furloughed employee.
In line with the Chancellor’s announcement at the end of May, CJRS grants will be tapered over the next few months:
- From 1 August, employers will be required once again to pay employer NI contributions and employer pension contributions. The CJRS will continue to pay 80% of wages up to a cap of £2,500 per month.
- From 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50)
- From 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).
The 10 June deadline for furloughing employees for the first time will not apply to employees returning from family-related leave, such as maternity, adoption, paternity, shared parental or parental bereavement leave. They will remain eligible for the furlough scheme provided that their employer has previously made CJRS applications for other eligible employees by that date.
