Further Details Released Regarding Changes To Furlough Scheme

On Friday 12th June, the Government published more detail about the changes to the Coronavirus Job Retention Scheme (CJRS).

The key principles of the furlough scheme from 1st July:

• Employers will only be able to furlough staff who have already been furloughed for the minimum period of three weeks, except any employees returning from certain forms of parental leave.
• “Flexible furlough” will be available, meaning that employees can work some of their normal working hours and be furloughed for the remainder. The employer pays the employee (in full) for the working time but can then claim under the furlough scheme for the remainder.
• There will no longer be a minimum period of furlough (currently, this is three weeks).
• The guidance refers to employers keeping “a new written agreement” when implementing flexible furlough.

The CJRS is set to come to an end on 31st October 2020 and the level of support will taper off as follows:

• From 1st August, employers will have to pay employer NI contributions and employers pension contributions for furloughed employees (currently, these can be claimed back under the scheme) with the CJRS continuing to pay 80% of wages up to the £2,500 per month cap.
• From 1st September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50 per month).
• From 1st October, employers will be responsible for 20% of wages with the CJRS paying 60% (capped at £1,875 per month).

All the Government guidance is here and there are some useful worked examples for reference.

Comment

Employers who want to use the flexible furlough option need to consider this now.  They need to look at their original furlough agreements to see whether employees need to be given notice of any return to work and ensure that this is complied with.

New written agreements will be required for flexible furlough and a comprehensive paper trail should be kept because of the possibility for HMRC to retrospectively audit claims. Employers may need to decide their approach for dealing with employees who are unable or unwilling to return to work.

If employers have concerns about the tapering of the furlough scheme they should note that they need to follow formal procedures before any redundancies can be implemented and this includes minimum consultation periods where an employer proposes to dismiss more than 20 employees at any establishment within a 90 day period.