COVID-19: Changes to the Job Retention Scheme (CJRS)

CJRS

Date

Jun 17, 2020

Categories

Covid-19

PAGE UPDATED 17/06/20

 

During the coronavirus daily press briefing on 29 May 2020, Chancellor Rishi Sunak outlined some key changes to the Coronavirus Job Retention Scheme (CJRS). These include the scheme being made more flexible to enable part-time furloughing, as well as employers beginning to contribute to the wage costs of their furloughed staff.  More details were then provided in a further update on 12 June 2020.

These are the key dates of how the CJRS will evolve over the coming months:

 

30 June

CJRS will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees whom they have already furloughed for a full 3-week period prior to 30 June.

This means that the final date for furloughing an employee for the first time was 10 June 2020. If an employee has been previously furloughed but doesn’t happen to be furloughed in June, they can still be furloughed subsequently.  The government has also announced that parents who have been on statutory maternity and paternity leave, and who return to work in the coming months, will be eligible for the furlough scheme even after 10 June cut-off date.

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

 

1 July

From 1 July, the number of staff who can be included on a CJRS claim cannot exceed the maximum number previously included in any single claim prior to 1 July.

Part-time furloughing will come into effect on 1 July, earlier than previously announced. This means employers can bring any previously furloughed employees back to work for any number of hours, while still claiming the CJRS grant for the remainder of their normal hours not worked. When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of one week instead of three.

Employers can decide the hours and shift patterns employees will work, but the employee will need to specifically agree in writing to the new arrangements. The employee will be paid in full by their employer for the hours they work, and the employer will be responsible for tax and National Insurance contributions on those payments. The CJRS scheme will continue to pay employer National Insurance (NICs) and pension contributions for the hours the employee doesn’t work.

Here’s a template letter to send to your employees about putting them on flexible furlough.

If employees are unable to return to work, or employers do not 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.

 

Claim periods from 1 July 

After 1 July, claim periods must start and end within the same calendar month, regardless if the employee is paid weekly.  The claim period must last at least 7 days, unless the period you’re claiming for includes the last few days in one month and the first few days of the next.  For example, if you have a weekly-paid employee who is furloughed over the end of June and the start of July, you need to submit two separate claims, one for the last 2 days of June and a second for the first 5 days of July.

You can only make one claim per period, and this should include all your fully furloughed and flexibly furloughed employees.  Dates of two claim periods cannot overlap – they have to follow on with no gaps between dates, but you don’t need to wait until the end of one claim period before you start making your next claim.  However, if you’re claiming for flexible furloughed employees in advance, make sure you know exactly what hours they’ll be working in the claim period – if you over-claim for hours they don’t end up working you’ll need to reimburse HMRC.

 

Calculating ‘usual hours’ from 1 July

Flexible furlough claims will be calculated based on an employee’s usual working hours.  So you take the number of hours they usually work, deduct the number of hours they actually worked, and the difference will be the hours they’ve been furloughed.

Usual hours worked must be calculated based on calendar days (7 day week), and crucially on hours worked not days worked.  There are two different calculations to work out an employee’s usual hours, depending on whether they work fixed or variable hours. An employee’s working pattern does not have to match their pay period (for example, an employee could be contracted to 40 hours a week, but be paid monthly).

 

1 August

From the beginning of August the CJRS will continue to pay 80% of wages up to a cap of £2,500. However, from this date employers will need to start paying for employer 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. Smaller employers will have some or all of their employer NIC costs covered by the Employment Allowance, so the government says they should not be significantly impacted by that part of the tapering of the government contribution.

 

1 September

From this date the Government will reduce its CJRS payments to 70% of pay, up to a limit of £2,190. Employers have to pay employees 80% of their wages for any furloughed hours, even if the government grant has reduced below 80%. This means businesses will be required to pay the remaining 10% of wages for furloughed staff, so that employees still receive a minimum of 80% of pay subject to the cap of £2,500.

 

1 October

From the start of October the Government’s contribution will reduce to 60%, up to a cap of £1,875. Employers will then be required to top this up by 20%, so that employees are still receiving at least 80% of their wages subject to the £2,500 cap.

 

31 October

The CJRS scheme will close at the end of October.

 

Over the next few months, as the CJRS winds down, employers will need to do some serious planning for both the short and longer term. There will be the need for you to think about which staff to bring back on board and when, full time or part time, will you offer them the option to work from home on a permanent basis, and will you have the need to make any redundancies?

If you are planning to bring back any staff into the workplace, you need to ensure that you have carried out a detailed risk assessment and made arrangements to ensure that the physical return of employees can be as safe as possible.

The new rules on claim periods and usual hours for flexible furlough are very complex, so if you have any questions please don’t hesitate to get in touch and we’ll be happy to help.

 

CJRS

Summary
COVID-19: Changes to the Job Retention Scheme (CJRS)
Article Name
COVID-19: Changes to the Job Retention Scheme (CJRS)
Description
Some key changes to the CJRS have been announced, including part-time furloughing and employers contributing to the wage costs of their furloughed staff.
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Paish Tooth
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