Changes to the Coronavirus Job Retention Scheme – how will the scheme work between June and October 2020?

Throughout May we heard a lot of talk about changes to the Coronavirus Job Retention Scheme (“the CJRS”) and, on 29 May 2020, Chancellor Rishi Sunak finally provided details of what those changes will be and, more importantly, how they will affect employers and employees.

“We await full details” has been a common refrain throughout the lifespan of the CJRS and it remains the case here, but for now we know the following headline developments will take effect over coming months:

• The CJRS will close to new entrants from 30 June 2020. From this date onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June 2020. This means that the final date by which an employer can furlough an employee for the first time will be the 10 June 2020, in order for the current three-week furlough period to be completed by 30 June 2020.

• On 1 July 2020, ‘flexible furlough’ will be introduced. This will allow employees to work (and be paid in full by their employer) for part of their normal hours and be furloughed for the remainder of their hours. It will be up to employers to decide the level of time split (by agreement with the employee) but any arrangement has to be in place for a minimum of a week at a time. Guidance for employers on how to calculate flexible furlough applications will be published by the Government by 12 June 2020.

• From 1 August 2020, employers will start to contribute to the payments to employees under the CJRS, initially in the form of the employee’s national insurance contributions and pension contributions only.

• From 1 September 2020, the Government’s contribution under the CJRS will drop from 80% to 70% of the employee’s salary (up to a maximum Government contribution of £2,190). From this date, employers will be required to pay 10 % of the employee’s wages so that the employer continues to receive 80% of their salary (up to a cap of £2,500 per month paid to the employee).

• From 1 October 2020, the Government’s contribution will decrease further to 60% of the employee’s salary (up to a maximum Government contribution of £1,875), and employers will continue having to top up the employee’s wages (now paying 20% of the employee’s wages) so that the employer continues to receive 80% of their salary (up to a cap of £2,500 per month paid to the employee).

• The furlough scheme will close on 31 October 2020.

The Employment Team at MLP Law can help you with any of issues raised in this update. Just contact us on 0161 926 9969, employment@mlplaw.co.uk or on our employment law-specific Twitter account @HRHeroUK.

MLP Law is also hosting a free live Q&A webinar on Thursday 4 June 2020 at 9.30am – 10.30am, where we will be expanding on some of the developments mentioned above.

You can register your place by emailing tanyam@mlplaw.co.uk or employment@mlplaw.co.uk.