URGENT UPDATE: FLEXIBLE FURLOUGH AND WHAT EVERY EMPLOYER NEEDS TO KNOW
Employers have been awaiting detail on how the continued Coronavirus Job Retention Scheme (CJRS) will work since 12th May 2020. On 29th May, the Chancellor announced the changes to how the CJRS arrangement will work for businesses who have furloughed employees. Toni Robinson, Managing Director of NucleusHR provides an urgent update for employers on the latest announcement from the government regarding the Coronavirus Job Retention Scheme (CJRS).
The main announcements are:
There are no changes to the scheme up until 31 July 2020 – therefore employers will receive the same support as they currently do – 80% of pay up to a maximum of £2,500 per month, plus associated pension, and employer NIC costs.
From 1 July 2020 – “Flexible Furlough” will be introduced, which means a CJRS grant can be claimed for the days an employee is on furlough even if they return to work for certain days (e.g. on furlough for three days of the week and working two days). This introduction of the Flexible Furlough means that CJRS cannot be used for anyone who has not been furloughed before 10 June 2020.
From 1 August 2020 – whilst the employer will still be able to claim a CJRS wage grant of up to £2,500 (or 80% of pay if lower) per month, the additional CJRS pension and NIC support will stop.
From 1 September 2020 – The employer will be required to contribute 10% of the CJRS wage costs, with the Government’s contribution therefore reducing to 70% (maximum of £2,187.50).
From 1st October 2020 – The employer will be required to contribute 20% of the CJRS wage costs, with the Government’s contribution therefore reducing to 60% (maximum of £1,875).
The CJRS arrangement is due to come to an end completely on 31 October 2020.
It is important to note, that regardless of employer or government contribution an employee who is benefiting from the CJRS scheme should always receive a minimum of 80% of their salary up to £2,500 per month.
Although the detail has altered since the government announcement on 12th May, the announcement demonstrates that the government is keen to continue to support businesses and also help get individuals back to work as soon possible.