Guest blog from SA Law Solicitors
On Friday 29 May 2020, the government announced how the Coronavirus Job Retention Scheme (CJRS) will operate from July to October to wind down the scheme, which is currently due to come to an end in November.
Employers will be required to contribute
Employers will be required to contribute towards the furlough cost of employees from August onwards in a gradual manner. Furloughed employees will continue to be entitled to a consistent amount of furlough pay (i.e. 80% of their wages up to a cap of £2,500 a month), however, employers will be required to contribute as follows:
- From 1 August – employers will pay the employee’s national insurance (NICs) and pension contributions
- 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))
Additionally, from 1 July, not only will the requisite claim period be reduced from three weeks to one week, but furlough staff will be able to return to work on a part-time basis whilst remaining eligible for the CJRS. The employee will be entitled to receive their full/contractual pay for any hours worked whilst receiving their furlough pay-rate for any of their usual hours not worked. This will be more difficult to determine in an agency situation where employees often have varied hours. Further guidance is due to be released in mid-June, which will hopefully clear this up, but it is reasonable to expect that employers can claim under the CJRS as they had in the previous month, using the same calculation, but with the claim reduced by the number of hours worked.
Also, agencies should be aware that as a restriction to the flexible furloughing scheme, employers will not be able to claim for more employees than they have previously claimed for under the CJRS.