The Chancellor has outlined further details on the extension of the Coronavirus Job Retention Scheme (JRS), including a deadline for new applications, improved flexibility to bring furloughed employees back part time in July, and a new taper requiring employers to contribute towards furloughed salaries from August.
According to new guidance, the Government will be restricting the Scheme to employers already using it and employees who have already been furloughed.
As of 10 June, registration for the furlough of employees not having previously been on furlough leave for a full three week period will close. After this date, employees who have not completed this period in full will not be eligible.
From1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced, and aims to help support people back to work.
Individual businesses will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them. Businesses will be responsible for paying their wages when employees return to work.
Key points to note:
- From July, the number of employees an employer can claim for in a claim period, which cannot straddle month ends, cannot exceed the maximum number claimed for in an earlier claim period. So if some employees have alternated between working and being furloughed, they should all be furloughed at some point in a June claim.
- For clients that have not furloughed staff because they required some of their services, but not all, there will be a one-off opportunity to furlough them from 10th June to the end of the month. If they don’t do this, they will not be able to furlough them at all as the scheme is closed to new entrants. If they do, however, they will then be able to access the flexible furlough funding for these employees from July-October whereby they can work part time and get furlough funding just for the hours they do not work.
From August 2020, the level of Government grant provided through the JRS will also change:
- For June and July the Government will continue to pay 80 per cent of furloughed employee’s salaries.
- From 1 August, businesses will be asked to contribute a share, but individuals will continue to receive that 80 per cent of their salary covering the time they are unable to work.
The JRS updates mean that the following will apply for the period people are furloughed:
|Government contribution||Employer contribution||% of gross employment costs employer would have paid had employee not been furloughed|
|June and July||80% of wages up to a cap of £2,500 as well as employer National Insurance (NI) and pension contributions||No payment required
|August||80% of wages up to a cap of £2,500||Employer NI and pension contributions||5%|
|September||70% of wages up to a cap of £2,187.50||Employer NI and pension contributions, plus 10% to make up 80% total up to a cap of £2,500||14%|
|October||60% of wages up to a cap of £1,875||Employer NI and pension contributions, plus 20% of wages to make up 80% total up to a cap of £2,500||23%|
Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
For further information about the Government measures to protect individuals and businesses, visit our COVID-19: Support for UK businesses hub.