Changes to the Coronavirus Job Retention Scheme

17th June 2020

UK Chancellor Rishi Sunak has outlined some important changes to the Coronavirus Job Retention Scheme (CJRS) coming into effect from 1 July.

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked.

When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have been furloughed for a full 3-week period prior to 30 June. This means that the final date by which an employer could furlough an employee for the first time was 10 June, in order for the current 3-week furlough period to be completed by 30 June.

From 1 August 2020, the level of grant will be reduced each month. To be eligible for the grant employers must pay furloughed employees 80% of their usual wages, up to a cap of £2,500 per month for the time they are being furloughed.

A timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:

  • There are no changes to grant levels in June.
  • For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
  • For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will have to pay ER NICs and pension contributions for the hours the employee is on furlough.
  • For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will have to pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
  • For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
  • The Coronavirus Job Retention Scheme will close on 31 October 2020.

Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.

If you require any further guidance on the scheme, please get in touch with a member of our team or visit our dedicated Covid-19 support page.

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