Further changes have recently been announced to the Coronavirus Job Retention Scheme (“CJRS”). There are currently millions of people who are part of the CJRS, so they will have a wide impact.
The changes can be summarised as follows:
- From 1 July 2020 employees who are on furlough will be able to return to work part time (currently an employee on furlough is not allowed to do any work for his/her employer).
- Nothing has been announced specifying how many hours an employee can work part time while on furlough, and so this is to be decided by each firm.
- An employer will need to pay the employee for the time that they are working (at their normal rate), while still being able to claim on the CJRS in relation to the employee’s normal hours that are not worked.
- Any new arrangement regarding working part time while on furlough must be agreed by the employer and employee in writing.
Closing the scheme
- The CJRS is going to close to new entrants from 30 June, which means that the final date that an employer can furlough an employee for the first time is 10 June.
Changes in payments
To recognise that the intention is to get employees returning to work, from 1 August, the level of the contribution to wages made by the CJRS will be slowly tapered.
- In July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee does not work (which is the current situation).
- In August, the government will pay 80% of wages up to a cap of £2,500 and employers will pay ER NICs and pension contributions for the hours the employee does not work.
- In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
- In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
- The caps will be proportional to the hours not worked.
- An employer can still choose to make up any shortfall in wages itself.
The law stated in this article is correct as of 2 June 2020.
If you have any employment law queries, please do not hesitate to contact David Nathan at [email protected] or on 020 7822 2247.
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