Coronavirus Job Retention Scheme Update 29th May 2020

Submitted by Dawn on 01st June 2020

On Friday 29th May, the Chancellor announced extensions to the Coronavirus Job Retention Scheme (CJRS). 

Details of the changes are below:

Flexible Furlough

From 1‌‌ July 2020, you will have flexibility to bring furloughed employees back to work part-time.  The government will continue to pay 80% of wages for the normal hours that they do not work up until the end of August.

  • You can choose the hours that your employees will work.  You will be responsible for paying their wages at 100% for the hours that they are at work.
  • Example – if your employee normally works five days per week, you could decide to furlough them for three days and ask them to work for two days.  The three days that they are not working will be paid at 80% (under the government’s CJRS) and you will pay them their normal pay for the two days that they work.
  • If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.
  • More details on the flexible furlough scheme will be available on 12 June 2020.

Employer Contributions

From August, the government grant provided through the job retention scheme will be

slowly tapered.

  • June and July – Nothing will change. The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (NI) contributions and pension contributions. You will not be required to pay anything.
  • August - The government will continue to pay 80% of wages up to a cap of £2,500 but you will pay NI and pension contributions.
  • September - The government will pay 70% of wages up to a cap of £2,187.50. You will be required pay 10% of wages (to make up 80% total up to a cap of £2,500) plus NI and pension contributions
  • October - The government will pay 60% of wages up to a cap of £1,875. You will be required to pay 20% of wages (to make up 80% total up to a cap of £2,500) plus NI and pension contributions.

New Entrants to the Scheme

It is important to note that the scheme will close to new entrants from 30‌‌ June 2020.  Therefore, from 1st July 2020 you will only be able to furlough employees that you have previously furloughed for a full three-week period.  This means that the final date that you can furlough an employee for the first time will be 10‌‌ June 2020.

Scheme Closure

The CJRS will end completely on 31 October 2020.  If you are relying on government funding, this means that you need to plan ahead prior to the closure of scheme to allow plenty of time for employee consultations if you are considering making redundancies.