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COVID-19: Coronavirus Job Retention Scheme – Key changes explained

Nick Thorpe
01/06/2020

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United Kingdom

On 29 May 2020, expanding on his earlier announcement of 12 May 2020, UK Chancellor Rishi Sunak provided an update on the future of the Coronavirus Job Retention Scheme (the "CJRS") and, in particular, the UK Government's proposals to:
 
  • increase the flexibility of the CJRS, by allowing employees to work part-time without breaking the continuity of their furlough period; and
  • require employers to share the cost of the CJRS from August 2020, whilst ensuring that the overall level of support available to employees would remain the same. 

The CJRS was first announced on 20 March 2020, and, currently, provides a mechanism through which the UK Government covers 80% of the wages of employees while they are furloughed (up to a cap of £2,500 per month).

  • Guidance for employers is accessible – here
  • Guidance for employees is accessible – here
  • Guidance on employee eligibility is accessible – here
  • Guidance on calculating a claim is accessible – here
  • Guidance on making a claim is accessible – here

Below we set out a timetable showing the future lifecycle of the CJRS in light of the UK Chancellor's most recent announcements.

30 June 2020

From 30 June 2020, the CJRS will be closed to 'new entrants' – 'new entrants' are any employees who have not been furloughed for at least three consecutive weeks prior to 30 June 2020.

Consequently, if the employer wants to take advantage of the CJRS after 30 June 2020, the latest date an employee can be furloughed for the first time is 10 June 2020.

Employers that furlough only part of their workforce at any one time by reference to an on / off rota should take particular note of this new requirement and, if they plan to take advantage of the CJRS after 30 June 2020, ensure that all employees on the rota meet this new minimum threshold.

 

1 July 2020

From 1 July 2020, employers will be able to bring employees back to work on a part-time basis and furlough them for the remainder of their normal working hours. Employers will have the autonomy to decide the number of hours and the shift patterns worked, depending on business need. 

Employers will be obliged to pay their employees for any hours worked, but remain eligible to claim under the CJRS (subject to the usual conditions) for any amount of time they are not working and furloughed.

 

1 August 2020

From 1 August 2020, the UK Government will pay 80% of furloughed employees' wages (subject to a cap of £2,500 per calendar month) for any period they are not working and furloughed.

However, employers will be required to pay all employer National Insurance contributions and pension contributions due (including contributions due on the value of the CJRS grant) and will not be able to recover this under the CJRS.

1 September 2020

From 1 September 2020, the UK Government will pay 70% of furloughed employees' wages (subject to a cap of £2,187.50 per calendar month) for any period they are not working and furloughed.

Employers will be required to pay 10% of employee wages to bring furlough pay up to 80% (subject to a cap of £2,500 per calendar month) and all employer National Insurance contributions and pension contributions due (including the contributions due on the value of the CJRS grant).

1 October 2020

From 1 October 2020, the UK Government will pay 60% of furloughed employees' wages (subject to a cap of £1,875.00 per calendar month) for any period they are not working and furloughed.

Employers will be required to pay 20% of employee wages to bring furlough pay up to 80% (subject to a cap of £2,500 per calendar month) and all employer National Insurance contributions and pension contributions due (including the contributions due on the value of the CJRS grant).

 

31 October 2020

The CJRS will come to an end.
 

The UK Government's announcement on the proposed changes is accessible here. It is expected that more detailed guidance on the operation of the CJRS over the next five months will follow on 12 June 2020.
 

How we can help

This announcement provides greater detail on the future of the CJRS and a number of new key dates that employers must bear in mind when considering the application of the CJRS to their businesses. Employers looking to take advance of the CJRS across its lifecycle should carefully consider their position and take action now, if necessary, to avoid losing the ability to furlough employees after 30 June 2020.

We are working with many businesses, across various sectors impacted by the UK Government's recent measures, who are looking closely at whether they can take advantage of the scheme as part of a series of actions to protect their businesses. 

Please do call or email any member of the Fieldfisher employment team for more information on the CJRS and for advice on how your business can best take advantage of it.

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