Changes to the Coronavirus Job Retention Scheme

On Friday evening (29 May), the Chancellor announced a number of changes to the Coronavirus Job Retention Scheme (the “Scheme”) which will take effect over the coming months. The full details of the changes are yet to be published, but here is a summary of the main changes:

  • from 1 August employers will be required to start paying national insurance and pension contributions;
  • from 1 September the Government will only reimburse 70% of salary (maximum of £2,190), with employers having to top up the remaining 10% (or more depending on what is agreed with an employee);
  • from 1 October the Government will only reimburse 60% of salary (maximum of £1,875), with employers having to top up the remaining 20% (or more depending on what is agreed with an employee);
  • the Scheme will close to new entrants from 30 June, meaning that the final date by which an employer can furlough an employee for the first time will be 10 June, in order for the current 3 week furlough period to be completed by 30 June;
  • part-time working will be allowed under the Scheme from 1 July, brought forward from August as originally intended; and
  • the Scheme will close on 31 October 2020.

In terms of part time working, HM Treasury has confirmed that from 1 July, employers will be able to bring employees on furlough leave back to work for any amount of time and any shift pattern. Employers will be able to claim under the Scheme for any of an employee’s normal hours not worked, whilst having to pay any full hours worked together with the tax and NI contributions on those payments. To be eligible for a continued grant under the Scheme, employers will have to agree a new flexible furloughing arrangement with their employees and confirm this agreement in writing.

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

You can find the full details published so far here.

If you have any questions in relation to the content of this article please contact a member of the Employment Team.

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