Coronavirus Job Retention Scheme: Flexible Furlough Explained and Other Updates

/ employment

On Friday 29 May 2020, Chancellor Rishi Sunak announced various changes to the Coronavirus Job Retention Scheme.  Whilst we await full updated guidance, the Chancellor did confirm:

  • The scheme will close to new entrants on 30 June 2020.  with the last three-week furloughs before that point commencing on 10 June.  It is unclear at this stage whether employees who have previously been furloughed and are brought back to work before 30 June 2020 can be re-furloughed after that date.  We are hopeful that the guidance will clarify this matter, and will provide an update on this as soon as possible.

  • From  1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time.  The Government had previously announced this option would be available from the end of July, and has now brought the date forward in an attempt to ease people back into work, and presumably to ease the burden on the public purse.

  • Businesses will be responsible for deciding how that split is to take place, and will be responsible for paying employees’ wages whilst in work.  The Government will continue to ‘top up’ the employees’ salary up to the current cap of 80% until the end of July.  The Government announcement states that “employers will need to report and claim for a minimum period of a week, for grants to be calculated accurately across working patterns”.  It is not yet clear what these minimum periods will be, but updated guidance will no doubt be released in advance of this date.  Employers must, at all times, remember their obligations to their employees and seek to agree, rather than impose, changes to the contract where appropriate.

  • From 1 August 2020, The government will pay 80% of wages up to a cap of £2,500. Employers will pay Employer National Insurance Contributions (ER NICs) and pension contributions.  

  • From September, the Government will begin to reduce their contribution to 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.

  • From October, the government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

  • The scheme will close on 30 October 2020.

Should you have any queries about the issues raised in this article, or on any employment related matter, please contact our expert Arvin Sandhu by email or on 01494 893 542.