On the 29th May 2020 the Chancellor provided us with an update to the Coronavirus Job Retention Scheme (CJRS) that outlines the contributions that both employers and the Government will make to the scheme costs as it draws to an end on October 31st 2020.
Here are the key points:
Flexible Furlough Pay
From 1st July 2020 the CJRS will allow employees to return to work on a part time basis whilst remaining in the scheme. So you can bring your employee back to work for part of their contracted hours and they can remain furloughed for the part of their contracted hours they don’t work.
This means if you have a full-time employee you could bring them back for three days per week and keep them furloughed for two days per week. You would pay their wages for the 3 days (full pay) and the government would continue to pay the furlough costs for the remaining two days.
The aim of this is to allow businesses and employees to gradually return back to normal.
Increased Furlough Cost Contributions for Employers
Throughout June and July the scheme will remain the same. The Government will pay 80% of furloughed employees wages and the associated employer national insurance and pension contributions.
From 1st August 2020 employers will be required to contribute to the costs of furloughed employees. The employers will need to pay the employer national insurance and pension contributions.
From 1st September 2020 the government will pay 70% of the furloughed employees wages and the employer will pay the remaining 10% and associated national insurance and pension contributions.
From 1st October 2020 the government will reduce the amount of furloughed wages they pay to 60% before the scheme closes on 31st October 2020.
No New Entrants to CJRS After 30th June 2020
After the 30th June 2020 the CJRS will close to new entrants. The employee will need to have been furloughed for a minimum of three weeks before this date. This means if an employee is not furloughed before the 10th June 2020 they cannot be furloughed at all.
Claims that relate to any period before 30th June 2020 must be submitted before 31st July 2020.