Coronavirus Job Retention Scheme – New details in relation to the extension

The Coronavirus Job Retention Scheme was extended to 31 October 2020 earlier in May and on 29 May 2020, the Chancellor announced more details about this extension to the scheme.  The new guidance is aimed at allowing employers to bring back staff on a part time basis, and involves employers contributing towards the cost of the scheme on an increasing basis. 

The scheme will close to new entrants from 30‌‌ June 2020.  From this point onwards, employers will only be able to furlough employees that you have furloughed for a full three-week period prior to 30‌‌ June 2020.  This means that the final date that you can furlough an employee for the first time will be 10‌‌ June 2020 for the current three-week furlough period to be completed by 30‌‌ June 2020.

Employers will have until 31‌‌ July 2020 to make any claims in respect of the period to 30‌‌ June 2020.

Flexible furloughing
A condition of the original scheme was that furloughed employees could not do any work whilst on furlough.  With effect from 1‌‌ July 2020, in order to assist employers in bringing employees back into work, employers will have the flexibility to bring previously furloughed employees back to work on a part time basis.  The Government will continue to contribute to wages for any of their normal hours they do not work at 80% up to a cap of £2,500 per month although this contribution reduces over coming months as explained below.

The employer can decide the hours and shift patterns that your employees will work on their return and you will be responsible for paying their wages in full for the hours they are working.  This means that employees can work as much or as little as your business needs, with no minimum time that employers can furlough staff for.
There are some key points to record and retain for the furloughed employees:

• Any working hours arrangement that you agree with the employee must cover at least one week and be confirmed to the employee in writing.
• When claiming the grant for the furloughed hours, employers will need to report and claim for a minimum period of a week but employers can choose to make claims for longer periods.
• 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 your employees are unable to return to work or you do not have work for them, they can remain on furlough and you can continue to claim the grant under the existing rules.

Employer contributions
From 1 March 2020 the Government have funded 80% of wages for furlough staff up to a cap of £2,500 per month as well as the employers’ national insurance and pension contributions.  Employers are now being asked to share the cost of the furlough wages as follows: 

• June 2020 - No change to the current position.  i.e. the Government will pay 80% of wages up to a cap of £2,500 per month as well as the employers’ national insurance and pension contributions for the hours the employee doesn’t work. 
  
  
• July 2020 - the Government will continue to pay 80% of wages up to a cap of £2,500 per month as well as the employers’ national insurance and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for any hours they work under the flexible furlough scheme explained above. 
  
  
• August 2020 - the Government will continue to pay 80% of wages up to a cap of £2,500 for the hours the employee does not work.  However, employers will now be expected to pay the national insurance and pension contributions for hours not worked as well as all costs for any hours worked under the flexible furlough scheme.  
  
  
• September 2020 - 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 the national insurance, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.  Employers will also pay all costs for any hours worked under the flexible furlough scheme.
  
  
• October 2020 - 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 the national insurance, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.  Employers will also pay all costs for any hours worked under the flexible furlough scheme.
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• For all periods, the cap on the furlough grant will be proportional to the hours not worked if the employee is working some hours under the flexible furlough scheme.