Changes to the Coronavirus Job Retention Scheme (CJRS)

On Friday, the Chancellor, Rishi Sunak set out further details on the CJRS following the announcement of the extension to the scheme earlier that month.

From 1 July it will be possible to bring furloughed employees back part time, providing much needed flexibility for many businesses who are not yet running at their previous capacity. This option of flexibly bringing employees back was not set to happen until August, and this earlier date allows many businesses to begin to re-open their businesses in a phased way as the country comes out of lockdown. Employers will be responsible for paying the element of wages that represent the part time work completed.

Tapering of the grant will begin in August to reflect that people and businesses should be returning to work.  This means that employers now have the security of knowing the government will continue to pay 80% of people’s salaries in June and July, after which employers will begin to contribute a small amount, with the individual employee continuing to be entitled to receive 80% of their salary whilst they remain on furlough.

From August the government will continue to pay 80% of wages up to a cap of £2,500 per month but employers will bear the cost of the employers national insurance and pension contributions. This is estimated to represent 5% of the gross employment cost the employer would have incurred had the employee not been furloughed.

Then, in September the grant from the government will fall to 70% up to a cap of £2,187.50 along with the employer continuing to pay the employers national insurance and pension contributions. This is estimated to represent 14% of gross employment costs. 

Finally, in October the grant from the government will fall to 60% up to a cap of £1,875 along with the employer continuing to pay the employers national insurance and pension contributions. This is estimated to represent 23% of gross employment costs. 

For example if you have an employee furloughed on the maximum monthly grant of £2,500 the amounts payable in each month will be as follows:

As people return part time as part of the CJRS grant claim employers will have to submit details including usual hours an employee works in a period and actual hours worked.

There will also be a fraud hotline available to employees who believe they are not receiving the full 80%, which they continue to be entitled to whilst furloughed.

The scheme will be closed to new entrants on 30 June, meaning anyone who has not already been furloughed will need to be placed on furlough from 10 June at the latest (3 weeks before the closing date).  After this date only employee’s that have already been furloughed will be able to have access to this scheme. Employers will have until 31 July to make their furlough claim for the period to 30 June 2020.

Further guidance on these changes is expected on Friday 12 June and we will keep you updated.

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