Changes to the Coronavirus Job Retention Scheme from 1 July 2020

The Coronavirus Job Retention Scheme (CJRS) has been in place since March 2020 and has helped many businesses retain their valued staff and prevented widespread redundancies.  As the country starts to emerge from lockdown, the Government is now proposing several changes to increase flexibility and reduce the overall cost to the taxpayer.

New Applications for CJRS

There are two key changes to the CJRS scheme which take effect at the end of June 2020:

  • The CJRS scheme will close for new applications on 30 June 2020
  • From 1 July 2020, employers can continue to use the furlough scheme for any employee who has been furloughed previously for at least one three-week period
  • This means that the final date that an employer can furlough an employee for the first time will be on the Wednesday 10 June to allow for full the three-week period to elapse

CJRS Claim Periods align with calendar months

From 1 July 2020 employers will not be able to claim CJRS for a period which overlaps two calendar months as the rules will be changing each month (see below).  The maximum claim period will be therefore be one whole calendar month.

Flexible Furlough

From 1st July 2020, the CJRS is being extended to introduce claims for “flexible furlough”.  Employers will be allowed to bring employees who were previously full-time furloughed back to work on different shift patterns that they will agree with the employee.

This flexibility will be good news for many employers who will be able to pay for hours worked and claim the CJRS grant for any hours not worked by employees, with reference to their usual working hours.

For example:

  • Before the pandemic, employee A worked 9am-5pm from Monday to Friday.  They were furloughed for the first time before 10 June 2020
  • From 1 July 2020 the employer agrees with employee A that they will return to working 9am to 5pm, but only on Mondays, Wednesdays, and Fridays
  • From 1 July the flexible furloughing scheme means that the employer will pay employee A their usual salary for Monday, Wednesday and Friday and can claim CJRS for the Tuesdays and Thursdays not worked

The minimum claim period for flexible furloughing will be 1 week, but employers may claim for longer periods provided they don’t overlap two calendar months.  Employers will need to keep a record of hours worked within any claim period, and the usual hours each employee would have worked in that same claim period. 

Further guidance is due to be released for the flexible furlough scheme on 12 June 2020.

Gradually Reducing CJRS Support from August to October

Support from the CJRS scheme will end on 31 October 2020.  Until then there will be a gradual reduction in grants for all businesses as follows:

June and July – no change – the Government will still pay 80% of wages (up to a cap of £2,500) as well as employer NICs and pension contributions for the hours the employee does not work (but see the 10 June deadline for new claims explained above).

August – the Government will still pay 80% of wages (up to a cap of £2,500), however the employer will have to cover the costs of the employer NICs and pension contributions for the hours the employee does not work.

September – the Government will only pay 70% of wages (up to a cap of £2,187.50) and employers will have to pay for the other 10% of the wages (up to a cap of £2,500), employer NICs and pension contributions for the hours the employee does not work.

October – the Government will only pay 60% of the wages (up to a cap of £1,875) and employers will have to pay for the other 20% of the wages (up to a cap of £2,500), employer NICs and pension contributions for the hours the employee does not work.

There have been calls for exemptions from these reductions from businesses who are not allowed to re-open for business, but no exceptions have yet been announced.

Help and Advice

If you are still considering placing employees on furlough leave for the first time and claiming the current CJRS grants, you only have until 10 June to make this decision.  For help and advice on any issue involving furlough leave, flexible furloughing or the CJRS in general our expert employment lawyers are here to help. 

Contact us today for a free 30 minute consultation and if you are an employer, don’t forget to ask about our ready made Furlough Packs containing all the template letters you need.

The Backhouse Solicitors Team

Tel: 01245 893400
Email: [email protected]
Visit: 71 Duke Street, Chelmsford, Essex CM1 1JU (Currently only for pre-booked appointments)

Or send us a message through the Contact Us page on this website