The Coronavirus Job Retention Scheme is changing - Flexible Furloughing

Published 1 junio 2020

Further details on the extension of the Coronavirus Job Retention Scheme (CJRS) were issued on 29 May 2020. From 1 July 2020, employers can bring employees back to work on a flexible basis, for any amount of time or shift pattern, while still being able to claim the CJRS grant for their normal hours not worked. However, employees must have been previously on furlough leave. The new scheme offers more flexibility so that employers can get employees back to work gradually and safely.

• When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week but, can claim for longer. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period. The employer will be required to pay the employee as normal for the hours they do work.
• The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June.
• This means that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3 week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.
• The employer must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
• From August 2020, the level of Government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work as follows:

- June and July: The Government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions.

- August: The Government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.

- September: The Government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.

- October: The Government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

- It will no longer be possible to overlap months when making a claim and employers can continue to make claims in anticipation of an imminent payroll run, at the point payroll is run or after payroll has been run.

The furlough scheme payment is capped as referred to above and applies to the hours employees are not working when they would normally do so. The Government fact sheet issued with the Government press release states that the cap will be proportional to the hours not worked and that further details will be included in future guidance. Employers will be required to pay the balance of the employee’s normal contractual pay unless the employee has agreed otherwise. As many employees are paid considerably higher than the Government cap, whilst the assistance will be greatly appreciated it will mean that some employers in heavily affected sectors will not be able to afford to keep employees on the books.

Employees who believe they are not getting their 80% share can also report any concerns to the HMRC fraud hotline. HMRC will not hesitate to take action against those found to be abusing the scheme.

The Self-Employment Income Support Scheme will be extended with those eligible able to claim a second and final grant capped at £6,570.

Further more detailed guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.