At the end of last week, Chancellor, Rishi Sunak announced further details regarding the extension of the Coronavirus Job Retention Scheme (CJRS).
Below we’re outlined all the latest updates which will help you to make a claim. Please don’t hesitate to get in touch with PKB if you have any questions.
- From 1 July 2020, employers will be able to bring previously furloughed employees back to work part-time and still receive a grant for the remaining time they’re not working.
- From 1 August 2020, employers will have to start contributing to the wage costs of paying their furloughed staff. Employer contributions will gradually increase in September and October.
- The scheme will close to new entrants from 30 June.
Further information about part-time furloughing
From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part-time. The government will continue to pay 80% of wages for any normal hours employees don’t work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.
Employers will decide the hours and shift patterns their employees will work and will be responsible for paying any wages for the hours worked. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.
Any working hours must cover at least one week and be confirmed to the employee in writing. Claims for furloughed hours must cover a period of a minimum of one week. You can choose to make claims for longer periods such as on monthly or two-weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If employees are unable to return to work, or employers don’t have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.
Further information about employer contributions
From August, the government grant provided through the job retention scheme will be slowly tapered.
- In June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they do work.
- In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions. For the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed.
- In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
- In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.
- The cap on the furlough grant will be proportional to hours not worked.
Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution.
Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.
It’s important to note that the scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June.
This means that the final date by which an employer can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers have until 31 July to make any claims in respect of the period to 30 June.
Guidance and support
Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12 June, including webinars and detailed online guidance. For information about how to claim, go to the gov.uk website.
PKB can make your furlough calculations and claims for you. Please don’t hesitate to get in touch if you need help. You may also find some of our previous articles helpful including:
- Receiving furlough payments on time
- Updated guidance on employee furlough eligibility
- New updates to the Coronavirus Job Retention Scheme
To read news and blogs from Rebecca Austin, click here >>