Furlough update from August 2020

The Job Retention Scheme (JRS) was expected to end on 30 June 2020, but will now continue until the end of October 2020.


Flexible Furlough

From 01/07/20 the scheme will allow part time working, but staff must have been furloughed by 10/06/20 to be eligible.

Employers can then claim the CJRS grant for a portion of their salary. So for example: an employee who works 5 days a week can be brought back 2 days a week and the employer will pay full wages for those days. The scheme “will continue to cover” the 80% of employee costs for the other 3 working days (reducing as detailed below)

Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.


Changes to the existing scheme

Employers will only be able to claim going forward if they have previously claimed under the pre-1 July scheme, so will be closed to new entrants on 30/06/20

There is a new limit to the number of staff who can be included on a claim. This will be based on the maximum staff ever included in any single pre-1 July claim.

The Chancellor also confirmed that from 01/08/20 the JRS grant will no longer cover the cost of employers’ National Insurance nor pension contributions with employers expected to cover these costs.

In practical terms, the intention is that the government will reduce its contributions over the remaining months of the scheme – August to October – with a corresponding increase in the employer contribution to ensure salaries are back to 80% of pre-Covid lockdown levels.

July  – the grant will be available on the same basis as now (the lesser of 80% of pay and £2,500)

August – the JRS will continue to pay 80% of wages, but employers will have to pay NIC and employers pension contributions

September – the JRS will pay 70% of wages while employers will take on the other 10% plus NIC and pension (capped at £2,190)

October – the JRS will pay 60% of wages while employers will take on the other 20% plus NIC and pension (capped at £1,875)


Points to consider

Ensure that if you are bringing an employee back to work on fewer than full time hours, that you will need to consult with the employee, to avoid breach of contract and possible constructive dismissal claims.

It is imperative you record and manage details of each employee, hours under work and hours under furlough to help us run payroll and to meet your HR obligations


Further guidance

See factsheet from the Government here.

See:  https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme