Key Changes to the Furlough Scheme and What it Means for ‘Flexible Working’

June 3, 2020

 

On 29 May, the Chancellor set out further details on the future of the Coronavirus Job Retention Scheme (CJRS), having previously confirmed that employers will have to make contributions to the scheme from 1 August and that the scheme will come to an end on 31 October.

Key dates and changes to the CJRS are as follows:

  • 10 June 2020 will be the last day that an employer can place employees on furlough leave.

  • On 30 June 2020 the scheme will be closed to new entrants.

  • From 1 July 2020, the scheme will allow for flexible working so furloughed employees can work part-time and be furloughed part-time. It is up to employers to decide how the time will be split. Employers can claim under the CJRS for an employee’s normal hours not worked, but they will have to pay in full (plus national insurance and pension contributions) for the hours they have worked. They will also need to get confirmation in writing from the employee that they agree to any new flexible furloughing arrangement.

  • From 1 August 2020, employers will have to start paying the national insurance and statutory minimum pension contributions of furloughed employees. Employers will still be able to claim 80% of an employee’s salary up to a maximum of £2,500.

  • From 1 September 2020, employers will have to pay 10% of a furloughed employee’s salary (or more depending on what has been agreed with the employee). Employers will be able to claim 70% of an employee’s salary up to a maximum of £2,190.

  • From 1 October 2020, employers will have to pay 20% of a furloughed employee’s salary (or more depending on what has been agreed with the employee). Employers will be able to claim 60% of an employee’s salary up to a maximum of £1,875.

  • On 31 October 2020, the CJRS will come to a close.

Employers should start planning for the future post-furlough and whether they are in a position to bring furloughed employees back to work on a part-time basis. They will also need to consider whether they can afford to contribute to furloughed employee pay from August or pay them in full by the time the scheme closes at the end of October.

Further guidance on the details of how this staggered reduction of the CJRS will work is expected to be published by 12 June.

 

 

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