Changes to the Coronavirus Job Retention Scheme were announced on Friday.
The scheme runs up until 31 October 2020 for employers with eligible workers.
Employers will need to contribute to their furloughed workers’ salaries from August 2020.
CJRS currently provides a grant towards 80% of workers’ salaries up to £2,500 per month. The Chancellor had already confirmed that furloughed staff would continue to receive the same wages as before, but with a reduced Government share and it has now been confirmed that the employer will have to contribute a percentage of salaries, as well as National Insurance and pension contributions from August 2020.
To ease towards this the Chancellor proposed the following:
· August 2020 – the employer will pay the National Insurance (‘NI’) and auto enrolment pension costs
· September 2020 – the Government will pay 70% of salaries up to £2,190 and the employer will pay 10%, plus the NI and auto enrolment pension costs
· October 2020 – the Government will pay 60% of salaries up to £1,875 and the employer will pay 20%, plus NI and auto enrolment costs
The scheme is to be closed to new entrants from 30 June. This will help cap the bill to the Treasury, but also prevent employers from rotating staff who are currently not working with those who have spent recent weeks at work. To be able to claim for a furloughed worker, they will need to be furloughed by 10 June, to allow the 3 weeks on furlough in accordance with the minimum requirements.
To make a claim under CJRS V2, employers must have submitted a claim under the existing scheme before 1 July 2020 and only employees who have been included in the claim in the first iteration of the scheme can be eligible for furlough under CJRS V2. Hence, employees must have started their furlough by 10 June.
From 1 July part time furloughing will be introduced to provide more flexibility in the scheme for employer’s to bring furloughed workers back. This will mean that a worker could work for 2 days in a week on full pay, fully funded by the employer, and be furloughed for the other 3 days with pay being met in accordance with the CJRS.
Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June. We will be providing a further update post 12 June.
