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The Coronavirus Job Retention Scheme (CJRS) will cease at the end of October and changes will be phased in from next month. On 12th June, HMRC released further details around how the scheme is due to wind down and what employers will need to do to prepare.
From 1st July, employers will only be able to furlough staff who have already been furloughed for three weeks or more. Hence why the cut off date to furlough new employees using the scheme was 10th June 2020.
From 1st July, employees will be able to return to work part time. The three week minimum furlough period will be removed and employees can be placed on flexible furlough for any amount of time.
Employers will be need a new written agreement with their employees when implementing flexible furlough. Employers will be required to pay employees in full for any hours worked, and then claim from the CJRS for hours not worked. Where employees are on flexible furlough payments from the CJRS will be proportionate to the hours they are furloughed. For example, if an employee with a normal salary of £30,000 who received the cap of £2,500 on furlough began working 50% of their hours from 1 July then the furlough payment would be 50% of the capped amount i.e. £1,250 with the employer also paying full salary for the hours worked.
CJRS grants will be tapered over the next few months. From 1st August, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500. From 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50); and from 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).
The new rules regarding flexible furlough and the added complexity of tapering will mean pay calculations could be challenging especially for small business owners.
Employees returning from maternity, adoption, paternity, shared parental or parental bereavement leave will still be eligible for the furlough scheme even if they have not previously been furloughed by 10 June, provided that the employer has used the furlough scheme for other eligible employees by that date.
You can read more about the new detail on CJRS here which also includes an example of how to calculate pay for a flexibly furloughed employee.
If you would like some legal advice as either an employee or an employer, and your rights during the COVID-19 pandemic, contact the Employment team at Downs Solicitors to see how we can help.