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Changes to Corona Virus Job Retention Furlough Scheme

Flexible Furlough

To date, employees that were placed on furlough could not undertake work for you. Originally, the scheme was only for employees who were not working, and while on furlough, an employee could not undertake work for or on behalf of the organisation. However, from 1st July, employers will be able to bring furloughed workers back to work on a part-time basis while still being able to claim under the CJRS for hours not worked.

The government will continue to pay 80% of furloughed employees wages for any normal hours they do not work, up until the end of August, but the employer will have to pay employees for the hours they do work, e.g. if a furloughed worker returns to work for two days per week, they would need to be paid as normal by their employer for these two days, while the government would cover the other three days.

From 1st July, employers will only be able to claim for employees who have previously been furloughed for at least 3 consecutive weeks any time between 1st March 2020 and 30th June 2020. An exception to this is where an employee is returning from statutory parental leave after 10th June 2020 and meets the qualifying criteria to be furloughed for the first time.

Employers will decide the hours and shift patterns their employees will work on their return, and so employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.

If employees are unable to return to work, or employers do not have work for them to do, they can remain fully furloughed and the employer can continue to claim the grant for their full hours under the existing rules.

Furlough Scheme Wind-Down

From August 2020, the level of grant will be reduced each month. Employers will have to start contributing to the wage costs of paying their furloughed staff, and this employer contribution will gradually increase in September and October.

In August, the government will continue to pay 80% of wages up to a cap of £2,500, but employers will be required to pay employer National Insurance contributions and employer pension contributions. For the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed. 

For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will need to pay employer NI contributions and employer pension contributions plus 10% of wages to make up 80% of the total, up to a cap of £2,500.
In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will need to pay employer NI contributions and employer pension contributions plus 20% of wages to make up 80% of the total, up to a cap of £2,500.

After 31st October, the government contributions will finish and the scheme will come to an end.