Furlough (CJRS) Scheme Update 1st June 2020

On 29th May 2020, the Government announced a number of changes to the Furlough scheme, meaning that from 1 July 2020, if required, employees can be brought back to work on a part time / reduced hours basis. For any hours or days that the employee works, employers will be required to pay their normal rate of pay, in full, while Furlough can still be claimed for the days where no work is available. 

The amount that the employer can claim under the Furlough scheme will be reduced on a monthly basis from 1st August, with the scheme closing completely on 31st October 2020 – see Important Dates and Scheme Changes below

IMPORTANT: The changes that come into effect from 1st July 2020 only apply to employees who have been Furloughed for a minimum of 3 weeks prior to 30th June 2020. This means that the last date for placing employees onto the scheme who have NOT previously been Furloughed is 10th June 2020.

Further guidance on Flexible Furloughing and how employers should calculate claims will be published on 12th June 2020.

Please also refer to the NOTES section at the bottom of this update for additional important information.

Important Dates and Scheme Changes

10th June 2020 – This is the last date that employees who have NOT previously been Furloughed can be put onto the scheme. Employees have to be on the scheme for at least 3 weeks prior to 30th June 2020 to qualify for payments during the period July to October 2020.

1st June to 31st July 2020 – the existing scheme and payment levels remain as they are now ie HMRC paying 80% of wages up to a cap of £2,500 per month and reimbursing employer NIC’s and minimum employer pension contributions where eligible.

12th June 2020 – Further guidance on Flexible Furloughing and how employers should calculate claims will be published. 

30th June 2020 – The Furlough scheme closes to new claims.

1st July 2020 – Providing an employee has been Furloughed for a minimum of 3 weeks prior to 30th June 2020, that employee can return to work on a part time / reduced hours basis, but must be paid at their full contractual rate of pay for any hours they do work. For any contracted hours or days that the employee is not required to work, the employer can still claim Furlough as before ie HMRC paying 80% of wages up to a cap of £2,500 per month and reimbursing employer NIC’s and minimum employer pension contributions where eligible.

31st July 2020 – All claims under the “old” scheme (1st March to 30th June 2020) must be submitted by this date. Note: Approx. 40% of employers have not claimed for employer’s NI and 3% pension contributions. If you are entitled to claim, you need do so by 31 July 2020.

1st to 31st August 2020 – Employees can return to work on a part time / reduced hours basis, but must be paid at their full contractual rate of pay for any hours they do work. For any contracted hours or days that the employee is not required to work, HMRC will reimburse 80% of wages up to a cap of £2,500 per month. However, employers will no longer be able to reclaim employer NICs and minimum pension contributions.

1st to 30th September 2020 – Employees can return to work on a part time / reduced hours basis, but must be paid at their full contractual rate of pay for any hours they do work. For any contracted hours or days that the employee is not required to work, HMRC will pay 70% of their wages up to a cap of £2,187.50 per month, with employers being required to pay 10% of wages (to make up to 80% total, up to a cap of £2,500). Employers will not be able to reclaim employer’s NICs and minimum pension contributions.

1st to 31st October 2020 – Employees can return to work on a part time / reduced hours basis, but must be paid at their full contractual rate of pay for any hours they do work. For any contracted hours or days that the employee is not required to work, HMRC will pay 60% of their wages up to a cap of £1,875 per month, with employers being required to pay 20% of wages (to make up to 80% total, up to a cap of £2,500). Employers will not be able to reclaim employer’s NICs and minimum pension contributions.

31 October 2020 – The Furlough (CJRS) scheme closes.

NOTES:

  1. To be eligible for the grant, employers must agree any new Flexible Furloughing arrangements with their employee and confirm that agreement in writing. 
  1. Employers will be able to make their first claim under the new scheme from 1 July 2020.
  1. As with the previous scheme, employers are still able to choose to top up employee wages above the scheme grant at their own expense if they wish.
  1. When making a claim under the new scheme, employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
  1. The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous Furlough (CJRS) scheme.
  1. Claim periods will be a minimum of one week, but can be longer. However they cannot overlap calendar months, due to the scheme terms changing each month.

Further information can be found by clicking on the 2 links below:

Chancellor Furlough Scheme Update 29th May 2020

Fact Sheet – Furlough and SEISS 29th May 2020