HM Revenue and Customs has now published further updates to the official guidance on the Coronavirus Job Retention Scheme (CJRS). The updated guidance now includes details of how the scheme is to be wound down between July and October this year, as announced by the Chancellor on 29 May. Here is a link to the updated guidance: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
By way of an overview:
• From 1 July, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks, meaning that the last date on which employers could furlough employees for the first time was 10 June.
• Employers will be able to implement ‘flexible furlough’ from 1 July, including part-time arrangements, and the minimum furlough period (currently three consecutive weeks) will no longer apply – flexible furlough agreements can last for any period albeit your claim period must be for a minimum period of 7 calendar days.
• Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless you’re claiming for the first few days or the last few days in a month.
• The updated guidance states that the employer will be required to ‘keep a new written agreement’ when implementing flexible furlough, and confirms that the employer will have to pay employees in full for hours worked (with CJRS grants remaining available for normal hours not worked).
• You can only make one claim for any period so you must include all your furloughed or flexibly furloughed employees in one claim even if you pay them at different times.
• The updated guidance includes a worked example of how to calculate pay for a flexibly furloughed employee (links below for convenience).
• A new document sets out the detail of how CJRS grants will be tapered over the next few months, as announced by the Chancellor on 29 May.
– from 1 August, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500;
– from 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50); and
– from 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).
• The updated guidance also acknowledges the announcement made by HM Treasury on 9 June that the 10 June cut-off for furloughing employees for the first time will not apply to those returning from family-related leave. Employees returning from maternity, adoption, paternity, shared parental or parental bereavement leave will still be eligible for the furlough scheme even if they have not previously been furloughed by 10 June, provided that the employer has used the furlough scheme for other eligible employees by that date.
Other useful links
Collection of guidance documents: https://www.gov.uk/government/collections/coronavirus-job-retention-scheme
Worked examples (updated guidance): https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions
Flexible furlough examples: https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/example-of-a-full-calculation-for-an-employee-who-is-flexibly-furloughed
As with our other updates, this is only intended to be a summary and not specific legal advice. If you need any help or would like further information about how we can support your business, or advice generally about managing your workforce during these unprecedented times, please do not hesitate to contact the Employment Team.