Important changes to the Government Furlough Scheme

As the government begins to ease lockdown measures that will see more people return to work, employers should be aware of upcoming changes to the Coronavirus Job Retention Scheme (CJRS), also known as ‘furlough’. Here is a summary of these changes, based on our current understanding.

Important dates & changes for June/July: 10 June: This is the last date by which employers can furlough any additional members of staff. From 1 July, furlough claims will be closed to new entrants. Because each employee must complete a furlough period of no less than 3-weeks for their employer to qualify for a grant, this means 10 June is effectively the last date that any employees who have been working can be furloughed by their employer for the first time.   1 July: In addition to the closure of the furlough scheme to new entrants, from 1 July new flexible furlough rules will apply. These allow employers to return employees (who have previously had a period of furlough leave) to work flexibly according to need and to continue claiming for a grant for hours not worked. For example, you may return some employees to full-time employment or, perhaps, part-time at half their normal working hours. In the first case, you will cease claiming in respect of that employee. In the latter case, you can continue to claim for the remaining hours not worked, subject to an overall cap of 80% of normal wages and a prorated limit of £2,500 per individual employee.   Employers should take time to assess their workforce requirements for the coming months in the next few days to ensure they have applied for the relevant government support. If you intend to return employees to work, helpful information and support regarding health and safety matters is available on the government’s official website.

Additional forthcoming changes: 1 August: Employers will no longer be able to claim for Employer National Insurance Contributions or Workplace Pension Contributions for staff who are furloughed 1 September: Government will reduce furlough cover to 70% of wages for hours not worked, capped at £2,187.50. Employers must top up the payment by 10% of wages to maintain the 80% payment overall to the employee, and pay Employer National Insurance Contributions and minimum Workplace Pension Contributions 1 October: Government will reduce furlough cover to 60% of wages for hours not worked, capped at £1,875. Employers must top up the payment by 20% of wages, plus Employer National Insurance Contributions and Workplace Pension Contributions 31 October: Furlough scheme is scheduled to close   Further information on the Coronavirus Job Retention Scheme can be found on the government’s official website.

As government announces more detail, we will provide further updates to ensure you are kept in the picture. If you have any questions, you can contact us in the usual way.