The Coronavirus Job Retention Scheme is due to change from 1 July to allow employers to take advantage of the scheme while bringing employees back to work part-time if they wish. At the same time, the scheme will be gradually rolled back each month with employers increasingly being asked to shoulder more of the burden of wages until it is brought to an end on 31 October. We have summarised the main changes for you below.
From 1 July, employers will be able to bring back to work employees who have previously been furloughed for a period of three weeks or more for any number of hours or shifts, while still being able to claim under the scheme for any hours not worked. Employers will also be able to take advantage of the new scheme in respect of employees not currently on furlough but who have nevertheless also previously been furloughed for at least three weeks.
The cut-off date for new employees to be placed on furlough in order to take advantage of the scheme going forward was 10 June.
Minimum furlough period
Any period of furlough beginning before the end of June must last three weeks. However, from 1 July onwards, any new periods of furlough under the new scheme are not subject to any minimum duration.
Under the existing scheme the government has subsidised 80% of furloughed employees’ wages up to a cap of £2,500 per month. This support will now be gradually tapered as follows:
- From 1 July: The scheme will continue as before in terms of the level of government support, i.e. it will pay 80% of furloughed employees normal salaries up to a cap of £2,500 per month in addition to employer National Insurance and pension contributions. This assumes an employee is still furloughed for all their normal hours. If an employee is working 60% of their normal hours, you will be able to claim 40% of 80% of their normal salaries or 40% of the monthly cap, whichever is lower. Employers will have to pay employees for any hours worked at the contractual rate.
- From 1 August: Employers will be asked to pay employer National Insurance contributions and pension contributions for the hours an employee is furloughed. The government will continue to pay up to 80% of furloughed employees’ normal salaries until the end of August.
- From 1 September: The government will pay up to 70% of wages for the hours an employee is furloughed. Employers must pay National Insurance contributions and pension contributions and top up furloughed employees’ pay to 80% of their normal salary for any furloughed hours.
- From 1 October: The government will pay 60% of wages for the hours an employee is furloughed. Employers must pay National Insurance contributions and pension contributions and top up furloughed employees’ pay to 80% of their normal salary for any furloughed hours.
Agreement to furlough
As before, any changes to an employee’s contract must be agreed. To be eligible for the grant, employers must have confirmed to their employee in writing that they have been furloughed. Government guidance makes clear that the employee does not have to provide a written response.
This blog is only a very brief outline of the changes to the Coronavirus Job Retention Scheme and a range of detailed government guidance documents are available on the gov.uk website including help calculating your claims. Given the increased complexity involved this is likely to be much used!
If you would like any advice on employment law issues around the Flexible Furlough Scheme and tapering of government support such as bringing employees back to work part-time or reducing the hours of employees currently working full time then we would be happy to help.
Please do contact our Employment Team who will be able to give you more specific advice.
This blog was written by Dominic Mantle.
Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.