Insights

Further to the announcement on 12 May 2020 of the extension of the Coronavirus Job Retention Scheme ('CJRS') to the end of October 2020 (please also refer to our previous Newsletter), further details as to how this extension will operate in practice were laid out by the Chancellor on 29 May. We set out below the particulars of this recent announcement.

We at Statura will continue to monitor any relevant development/announcement and are actively working with employment law specialists in order to keep our clients updated and to support them during the CJRS claims process. In the meantime, please speak to your usual Statura contact should you wish to discuss the content of this document or indeed the way in which the COVID-19 outbreak is affecting your business in more detail.

From 1 July 2020, employers will have the flexibility to bring previously furloughed employees back to work part-time. The government will continue to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

The employer can decide the hours and shift patterns that their employees will work on their return and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that the employer can furlough staff for.

Any working hours arrangement that the employer agrees with the employee must cover at least one week and be confirmed to the employee in writing.

If the employees are unable to return to work, or the employer does not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

From 1 August, the government grant provided through the job retention scheme will be slowly tapered.

• in June and July, the government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work;
• in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions;
• in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
• in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
• the cap on the furlough grant will be proportional to the hours not worked.

For a "smaller" employer, some or all of the ER NIC bills will be covered by the Employment Allowance, so those businesses should not be significantly impacted by that part of the tapering of the government contribution.

CJRS V2 will end on 31 October 2020.

From 1 July, CJRS grant claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. This is necessary to reflect the forthcoming changes to the scheme.

A new minimum reporting period of one week will apply from 1 August 2020. More frequent claims will not be accepted, but the reporting period can be longer. The employer can choose to make claims for longer periods such as on monthly or two weekly cycles. The employer will be required to submit (payroll) data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

It’s important to note that the scheme will close to new entrants from 30 June 2020. From this point onwards, employers will only be able to furlough employees that have been furloughed for a full three-week period prior to 30 June.

This means that the final date that an employer can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.