On Friday 12 June, further guidance was provided as to how the Coronavirus Job Retention Scheme (CJRS) will operate as it is wound down.

Flexible furloughing

From 1 July, employers will have greater flexibility to ‘part time furlough’ employees i.e. to bring back furloughed employees for any amount of time or shift pattern.

Any employees, so long as they have been furloughed for a minimum 3 week period between 1 March and 30 June, can be put on full or part-time furlough. To be part of the extended scheme, employees do not need to be on furlough on 30 June itself (i.e. they can be working at that time), but they do need to have been furloughed before. Exceptions have been made for those returning from parental leave, allowing those returning from extended leave to be furloughed after 1 July.

In making use of flexible furlough, employers will:

  • be responsible for paying an employee for the hours they have worked; and
  • be able to claim the CJRS grant for the hours that employee has not worked.

The number of employees an employer can claim for after 1 July cannot exceed the number in any previous claim. For example, an employer that has claimed for 50 employees in April, 75 in May and 60 in June will not be able to claim for more than 75 employees in any claim after 1 July.

Calculating flexible payments

The calculations for flexible furlough are complex, and the government has prepared a number of working examples to assist with the calculation and has updated its calculator at gov.uk.

To make a claim, employers will need to work out their employees’ usual hours and record for each claim period:

  • the actual hours they work; and
  • the furloughed hours for each claim period.

That should be relatively straight forward for fixed hours.

For variable hours, “usual hours” will be calculated based on the higher of either:

  • the average number of hours worked in the tax year 2019 to 2020, or
  • the corresponding calendar period in the tax year 2019 to 2020.

Include any annual leave paid at 100% and any non-discretionary overtime.

Changes to the way claims are made

Any claim in respect of the period before 30 June must be made by 31 July 2020.

From 1 July, the scheme rules will change each month. This means that claim periods starting on or after 1 July must start and end within the same calendar month.It is possible to make more than one claim in each month, but each claim must be for a period of at least seven days.

The only exception to the seven-day claim period is if the period you are claiming for includes either the first or last day of the calendar month.

Reduction in government contributions

Both flexible and full furlough options will remain available until 31 October. Although the government contribution will begin to reduce as of 1 August, to continue to be eligible for the grant employers must pay furloughed employees 80% of their wages (up to a cap of £2,500 per month). This will be made up as follows:

  • 1 August: Government will pay 80% of wages (up to £2,500) for the hours an employee is on furlough. Employers will cover National Insurance and employee pension contributions for the hours the employee is on furlough.
  • 1 September: Government will pay 70% of wages (up to £2,187.50) for the hours an employee is on furlough. Employers will cover National Insurance and employee pension contributions and pay 10% of wages (up to £312.50) for the hours an employee is on furlough.
  • 1 October: Government will pay 60% of wages (up to £1,875) for the hours an employee is on furlough. Employers will cover National Insurance and employee pension contributions and pay 20% of wages (up to £625) for the hours an employee is on furlough.

Employers will continue to have the option to top up employee wages above the 80% total, and £2,500 cap, for the hours not worked at their own expense.

Contact us

If the above changes raise any questions about your upcoming claims, please contact your usual relationship practitioner or email our dedicated CJRS team.

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