June 2nd, 2020.


The Chancellor recently announced further details about the Coronavirus Job Retention Scheme which will make it more flexible and enable businesses to get employees back to work part-time.

Part time furloughing
From the 1st of July, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80 per cent of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week. They can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

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.

Employer contributions
From August, the government grant provided through the job retention scheme will be slowly tapered.

In June and July, the government will pay 80 per cent of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work.

In August, the government will continue to pay 80 per cent of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5 per cent of the gross employment costs that they would have incurred if the employee had not been furloughed.

In September, the government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10 per cent of wages to make up 80 per cent of the total up to a cap of £2,500.

In October, the government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20 per cent of wages to make up 80 per cent of the total up to a cap of £2,500.

The cap on the furlough grant will be proportional to the hours not worked.

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted by that part of the tapering of the government contribution.

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.

The CJRS scheme will close to new entrants from the 30th of June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to that date. This means that the final date by which an employer can furlough an employee for the first time will be the 10th of June for the current three-week furlough period to be completed by the 30 of June. Employers will have until the 31st of July to make any claims in respect of the period to the 30th of June.

Since it was launched, the furlough scheme has so far been used by one million businesses to support 8.5 million jobs, at a cost of £15 billion. The Chancellor, Rishi Sunak, has said that the job retention scheme will end in October 2020.

CLICK HERE for more on Government business support.