In addition to the already announced extension to the period of the CRJS scheme, the government’s further revisions aim to enable employers to begin bringing employees back to work on a part-time basis, and sharing some of the associated costs.
As already announced, the CJRS has been extended to run to 31 October 2020, with the current funding of the scheme at 80% of an employee’s wages (up to a maximum of £2,500 per month) to continue until 31 July 2020.
Beyond the current scheme, and throughout August, the government will continue to fund 80% of salary, but employers will be expected to pay Employers National Insurance and pension contributions for furloughed employees. This is estimated at around 5% of the value of current claims.
From September, the contribution from employers will increase to 10% of the furloughed salary, as well as the NI and pension funding, with the government paying 70%. From October, the employer contribution will increase to 20% and the government funding will reduce to 60%.
To enable employers to begin the process of a gradual return to work, from 1 July the government have also introduced the ability for employers to furlough staff flexibly. As an example, an employer could ask an employee to work three days a week and to be furloughed for two days a week, with the employee being paid three days at their normal rate and two days at 80% of salary through the scheme. This will also assist employers in enabling them to put in place the required social distancing measures by having a reduced workforce on site at any one time.
The newly introduced option to furlough flexibly will, in effect, constitute a new furlough scheme and, if you are considering furloughing staff who have not been furloughed previously, you will need to furlough these staff by 10 June 2020 at the latest, in order that the three week minimum furlough period can be achieved before the scheme changes on 1 July.
As with the original announcements regarding the CJRS, we are expecting further refinements to the scheme to be announced as the details are worked through. We will of course keep you updated as we receive further information.
For further information you can read our Coronavirus Job Retention Scheme FAQs. Should you have any queries related to your specific situation please reach out to us.
During these unprecedented times, HR Service Centre can provide you with HR consultancy advice. We can help you make the right decisions and ensure compliance with employment legislation. We can cover areas such as the CJRS, redundancies and restructuring programmes. If you have any queries or concerns, please do get in touch.