On 12 June, HMRC published further guidance on how the Coronavirus Job Retention Scheme (CJRS) will operate whilst it is wound down from July until its end date of 31 October. The further guidance deals primarily with flexible furloughing, which, from 1 July 2020, will allow employees to return to work part-time whilst remaining eligible for the CJRS for their usual hours not worked.
Unfortunately, the guidance is spread over a number of different webpages, some new and some being updated versions of previous guidance, making it rather complex. Here are the key links to gov.uk site that answers to the most pertinent questions about updated guidance on Flexible Furloughing:
- Can you claim under the CJRS? (updated guidance)
- Which employees can be put onto furlough leave? (updated guidance)
- How much can you claim under the CJRS? (new guidance)
- What do you need to do before you claim CJRS? (new guidance)
- How do you claim wages through the CJRS? (updated)
What are the key requirements of the flexible furlough scheme?:
- Flexible furloughing is only available to employees who have previously been furloughed (and claimed for under the CJRS) for a full three week period prior to 1 July. As advised in previous updates, the furlough scheme is now closed to new entrants (save in respect of employees returning from a family-related leave (e.g. maternity leave), who can begin utilising the scheme if their employer has previously made a claim in respect of other employees);
- Furloughed employees are no longer prevented from working for their employer. They can work for some of the week, and be furloughed for the rest, with the proportion of work and furlough leave to be decided between the employer and the employee;
- The flexible furlough arrangement must be mutually agreed between employer and employee, and set out in a written agreement;
- The employer will pay the employee in full for any hours worked, and can claim under the CJRS for a pro rata amount of 80% of the employee’s salary based on the proportion of hours not worked, subject to the relevant upper limit;
- For fixed salary employees, a claim for flexible furloughing under the CJRS will be based on the pro-rata amount of hours not worked in comparison to the number of hours worked in the pay period before 19 March. For employees with a variable salary, any claim under the CJRS for flexible furloughing will be the higher of the pro-rata amount of hours not worked in comparison to either the average number of hours worked in the previous tax year or the hours worked in the corresponding calendar period in the previous tax year. There is guidance on calculations for how to work this out available on gov.uk here and here.
Key dates for the CJRS:
From 1 July there will be no minimum furlough period (currently it is three weeks). However, any claim through the CJRS portal must be in respect of a minimum one-week period, and we would therefore suggest that employers put in place a self-imposed one-week minimum furlough period.
The updated guidance also confirmed the tapering of the CJRS, in which employers will have to contribute to furlough payments from August onwards, which is as follows:
- From 1 August – employers will pay the employee’s national insurance (NICs) and pension contribution
- From 1 September – employers pay NICs, pension contributions and 10% of wages (with the government contributing 70% (to a monthly cap of £2,187.50);
- From 1 October – employers pay NICs, pension contributions and 20% of wages (with the government contributing 60% (to a monthly cap of £1,875).
If you would like our assistance, please do not hesitate to contact a member of our team.