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Coronavirus Job Retention Scheme (CJRS) Update

There were very few surprises in the Government’s latest Guidance dealing with changes to the Coronavirus Job Retention Scheme (CJRS). It was published late on a Friday (so original) and, again, it is not a straightforward read. Which is why it has taken some time for me to digest rather than join the mad scramble to post within minutes of the Guidance hitting the website.

Most of you will already be aware of the ‘headline’ changes which will be introduced with effect from 1 July 2020 and these are featured in the Guidance. That said, there is also some detail in there which employers need to consider when addressing the changes and some of which is summarised below.

  1. Employees who have not previously been furloughed for 3 weeks as of 30 June 2020 cannot be furloughed after that date. However, this does not include individuals returning from family-related leave who can still be furloughed after that date subject to the employer meeting specific requirements.
  2. There will no longer be the requirement for the employee to be furloughed for a minimum of 3 weeks before the employer can claim furlough payments. In fact there is no minimum furlough period BUT employers can only make claims for payment in respect of periods of at least 1 week.
  3. For previously furloughed employees who start a new period of furlough before 1 July 2020, the period of furlough must be 3 weeks in order for the employer to be able to claim payment – even where the 3 week period ends after 1 July 2020.
  4. Claims for furlough payments for periods ending on 30 June 2020 must be made by 31 July 2020.
  5. Claims cannot overlap calendar months so if an employee is furloughed over the end of one month and the beginning of the next, the employer will need to make separate claims for the respective periods.
  6. The number of employees that the employer claims furlough payments for cannot exceed the maximum number of employees that they have claimed for in a previous claim. This could impact where the employer has rotated furloughed staff before 1 July 2020 as the number of employees to be furloughed in the future (and payment claimed for) may well be dictated by the numbers involved in previous claims. Employers will need to manage that situation carefully.
  7. From 1 July 2020, ‘flexible furlough’ will apply. The Chancellor announced this in the context of furloughed employees being allowed to return to work on a part-time basis and being furloughed for the hours that they do not work. The Guidance is not as specific and we interpret it to mean that ‘flexible furlough’ applies to all employees that have been furloughed for at least 3 weeks, irrespective of whether they are still furloughed or they have since returned to work. It is for the employer and employee to agree to the arrangements for flexible furlough although it remains the position that during the hours or days that they are furloughed, the employee cannot undertake any work for the employer. The Guidance suggests that there needs to be a written agreement dealing with the arrangements for flexible furlough.
  8. From 1 August 2020, the CJRS will not cover employer’s pension or NI contributions so the employer will be required to pay them.
  9. As of 1 September 2020, the Government will pay 70% of the employee’s wages up to a maximum of £2,187.50 per month with the employer making up the 10% difference to 80%.
  10. Then from 1 October 2020, the Government’s subsidy will drop further to 60% of the employee’s wages up to a maximum of £1,875 per month with the employer making up the remaining 20%.
  11. The CJRS will then end on 31 October 2020.

As a result of these changes, the method for calculating furlough payments will also be different from 1 July 2020. The Guidance does set out a number of examples for calculating pay but they are relatively complex and present something of an increased administrative burden for the employer at what is clearly a critical time for them.

We hope this general summary is useful. If our employment team can assist you with any queries you may have, please get in touch with us on 01482 325242 or email enquiries@andrewjackson.co.uk

Correct as of 16.6.2020

 

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