Job retention scheme phase 2

Job Retention Scheme Phase 2 FAQ's

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For guidance, Information and FAQ's for Phase 1, please click here,


Our Head of Payroll and Employee Services, Karen Thomson has been working closely with HMRC to understand the new Job Retention Scheme rules and has created these guidance notes and templates to help support you through this next phase.

Resources and Templates


Guidance Notes

Job Retention Scheme guidance provided in a handly downloadable pdf. Please click here to download your copy.

CJRS 2 Claim Templates and Instructions

Armstrong Watson’s technology team have developed three spreadsheet templates to assist you with the new calculations for the CJRS scheme from 1st July. Click here to find the templates and Instructions.

Flexible Furlough Letter Template

A letter for employers and employees, explaining the terms of a flexible furlough agreement. Click here to download the template.

Job Retention Scheme Phase 2 explained

In this webinar Karen Thomson provides an overview and clarity of how the second phase of the scheme will operate, the flexibilities within it, eligibility criteria and the detail and required to calculate furlough claims.

Phase 2 FAQ's


Employee Eligibility​

When is the cut off date to submit claims under scheme 1?

You must submit all claims under scheme 1 (to 30th June) by 31st July 2020.

Can a member of staff that has returned to work from the beginning of June opt in to the part time work /furlough scheme?

Yes, as long as they were furloughed for a minimum of 3 consecutive weeks between 1st March and 30th June, then they are eligible for scheme 2 from 1st July 2020.

If we have furloughed employees in scheme 1 and brought them back earlier, and do not need to make any sort of claim in July, can we still furlough those employees in future periods in scheme 2?

Yes, you can do this as long as they were in a claim under scheme 1.

Does an employee still have to have a minimum 3-week furlough period?

To qualify under scheme 1, a consecutive 3 week period must have taken place on furlough.  For scheme 2 this no longer applies, however, the claim periods must be in full weeks, except at the beginning and end of the month where the period isn’t a full week e.g. 1st to 5th July, then would be 6th to 12th, 13th to 19th, 20th to 26th and then finally 27th to 31st, although it might be easier to make a claim for the whole month of July.

I have a member of staff who has been furloughed since 20 March - can I bring them back now flexibly or do I have to wait until 1 July?  My concern being that there isn't 3 weeks and I don't want to bring her back full time now until July.

To use scheme 2 it must be from 1st July, so if brought back in June and works, then no claim can be made under the existing scheme 1.

If an employee was furloughed in April & May, then brought back to work 3 days a week in June and paid in full because Scheme 1 was all-or-nothing, if we want him to continue working 3 days a week in July, can he be furloughed again for the 2 days he doesn't work?

Yes, as he was furloughed for at least 3 weeks during scheme 1 you will be able to adopt flexible working in scheme 2.

If employee has temp work elsewhere outside of usual hours, will this be a problem?

No, if different employers both are treated separately.

If someone is furloughed for a further 3 weeks on the 22nd June, could they be brought back at the beginning of July or will they need to do the full 3 weeks?

If they have already served the minimum 3 weeks between 1st March and 30th June then you can bring them back in July under scheme 2.

If someone was furloughed for 3 weeks prior to the 10 June, but were working on the 10 June are they eligible for flexible furlough?

Yes, from the 1st July.

If an employee was furloughed on 22nd June, does the 3 weeks rule apply i.e. he/she could not come back until 12 July 2020 as 22 June was phase 1 scheme?

If the first time they were furloughed was 22 June then they are not eligible for scheme 1 or scheme 2.

If someone works one full week out of three can they still be on furlough?

Yes, but only under scheme 2 from 1st July.

A furloughed employee is now "off sick" can I continue to furlough him?

Yes, but if you opt for SSP rather than furlough pay you will not be able to reclaim under the furlough arrangements. HMRC’s guidance states the following:

If your employee becomes sick while furloughed - https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme

Furloughed employees retain their statutory rights, including their right to Statutory Sick Pay. This means that furloughed employees who become ill, due to Coronavirus or any other cause, must be paid at least Statutory Sick Pay. Subject to eligibility this includes those self-isolating or shielding because of Coronavirus. It is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate.

If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP if the sickness is related to coronavirus.

If employers keep the sick furloughed employee on the furloughed rate for the period that they are sick, they remain eligible to claim for these costs through the furloughed scheme. Such an employee can continue to be furloughed from 1 July so long as you have previously submitted a claim for them in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.

Where do we stand where we have a member of staff who was off ill on long-term sick at the start of lock down but is fit to work later whilst furlough is still active but we have no work for them?

If already furloughed you can still keep them furloughed if the business chooses to.  However, if you have been paying sick pay and you have not furloughed them by 10th June this will no longer be an option for you.

Notifying Employees

If you write a letter to an employee stating that they are furloughed until the end of October, but circumstances change and you then need to make a redundancy before the end of October, what is the position with the employer?

If your business circumstances change and you need to make a person redundant then you will need to follow the rules on redundancy.  You will not be able to re-claim any monies regarding the furlough scheme if the employee has left the business by way of redundancy.  ACAS provide some useful information that can be found here: https://www.acas.org.uk/redundancy

Given the flexible approach being offered to help businesses to bring staff back on a phased basis, would you recommend that everyone has their employment contract changed to zero hours until the end of the furlough scheme period?

My understanding is that contracts of employment remain in place during furlough, however in line with usual employment rights should there be changes to contractual arrangements you would need to consult and agree with your employees and perhaps seek employment law advice from a specialist. The scheme is designed so that you can claim for the hours furloughed and still bring back for some of the time. 

Do I need to put changes to the furlough arrangements in writing to employees?

Yes you must advise of any changes each time the situation is expected to change.  It will be helpful if you can plan ahead for each month if possible.  If hours are likely to fluctuate you might be better waiting until after the month has ended to submit your claim to ensure you are claiming for the furloughed hours in that period.  The written documents (can be sent by email) must be kept for 6 years.

Can I end employment for someone on zero hour contracts from 30th June?

Existing employment rights are still in place and therefore, regardless of the Job Retention Scheme, if you need to end employment contracts you would do so as you would have done prior to the Coronavirus. 

How much notice do you require to give the employee of the change?

The employee is still under contract with you, so in theory they could be expected to work their normal hours and furlough just end.  However, in the spirit of good employee relations I would suggest you advise the employee as soon as possible to allow for the employee to make any family arrangements etc. but you could also consider if possible the employee works from home.

If we intend to leave a full time staff member totally on furlough in July (i.e. there situation unchanged from the present) do we have to send out another letter to the employee to say they are still on furlough? Is such a letter required every time the furlough scheme changes?

This will be the last time the scheme changes as it closes on 31st October 2020.  However, if you previously sent out a letter saying they would be furloughed to 30th June, then you will need to send them another letter to extend to what period you intend, but no later than 31st October.

We are in education, so staff who are on furlough will start back at the end of August, can we put specific dates in a letter?

Yes you can.

What can I do if an employee refuses to come back to work either part time/flexi time to help re-establish the business?

This is really a question for an employment law specialist, but my opinion is that they have a contract of employment and if refusing to carry out their duties under this contract then normal disciplinary rules might apply?

What if you don't know the hours going forward to October so can't put it in the letter?

You will need to extend the furlough period but perhaps say you will look to offer flexible working when the business allows and you will advise them accordingly, but once you do agree you will need to write to them each time you decide on hours they will work.

Employee Payments & Working Hours

Can you stop and start furlough in scheme 2 on a rota basis and not necessarily on the previous three week period?  

Yes you will be able to do this for example:

  • Employee A returns on 1st July for 20 hours per week out of their usual 37 and then returns to furlough on 10th July. You can still claim for the furlough hours.
  • Employee B returns on 10th July for one week and does 15 hours out of 37 and then returns to furlough.
  • Employee A then comes in on 17th July and so on…

We have staff on furlough and would like to know how to deal with the holiday pay that is accruing whilst they are not working. I wouldn't want to bring them back to work after 3 months and for them then to take holiday leave during the summer months.

Holiday pay will continue to accrue and the Government announced changes to permit holiday accrual to span over two years rather than the existing legislation of just one.  However, you can advise employees to take their holidays during furlough leave, but where they do you must top up to 100% of what would be current pay i.e. take account of National Minimum Wage etc.  You will not be able to claim 80% of the current pay, only 80% of the reference pay i.e. pre 19th March and or average earnings in 2019/20. Further guidance on holidays and furlough can be found here: https://www.acas.org.uk/coronavirus/using-holiday

Can you still top salary up to 100% and bring back part time?

Yes. You can pay whatever top up monies you choose to, as long as the employee is paid at least 80% of their reference pay (pay in period prior to 19th March or an average)

Does an employer have to top up to the 80% in Sept and October?

Yes. An employer must still pay at least 80% of the reference pay, but will only be able to reclaim 70% of that pay in September and 60% in October.

If your staff are on a zero contract and you take them off furlough as you can’t afford the additional payments from August, do you then only pay them for the hours you can give them going forward?

You do not have to operate under the job retention scheme, but if you do reclaim you must comply with the rules, therefore if you do not intend to make any claims and instead employ your people on zero hours and pay 100% for the time they work then you can do so, following all the relevant employment law/rights legislation.

In July and August can someone work 7.5 hours out of 37.5 and we claim 80% furlough?

You will claim 80% of the reference pay on the furloughed hours.

Is there any minimum of actual working hours from 1st July onwards? I read someway that it said minimum has to be 7 calendar days?

There is no minimum hours, however, as in previous question and answer, you can only reclaim in full weeks, with the exception of the beginning and end of a claim period.

We have people who have varied hours, but some of their work is paid on piece rate rather than a rate per hour, so do we need to effectively go back and calculate how many hours that piece rate was for to be able to get average hours?

There isn’t mention in the new examples of piece rate calculations, therefore I would suggest you would continue to work out the pay and then the hours as now, using the averaging method. Should this change I will provide a further update to these FAQs.

When employees are working on flexible furlough, will they need to be paid new NMW & NLW?

Yes all employment rules will apply.

As we have monthly payroll, can you build staff hours up on a weekly basis, or does the number of part time hours have to be fixed for the duration of the monthly payroll?

You can offer flexibility that suits your business needs.

Furlough Claims

Under phase 2 JRS, if the period of pay, such as weekly wages, spans a month end, are we required to split the week into different claim periods?

Yes. From 1 July all claims in July must be in one period, however, as previous example above, you could do weekly in multiples but you wouldn’t be able to include any claim from the end of June, or from the beginning of August.

How will we work out JRS for directors if not on the calculator? (At moment payroll give me spreadsheet and I do the claim on HMRC.)

I believe the calculator is referring to single director payments, if you are paying yourself in frequencies other than annual and are claiming now, then you will still receive information from payroll and submit your claim.  (If you are a client of Armstrong Watson’s payroll service, work is being undertaken now to design templates to assist clients where possible.  We expect to issue further guidance directly to clients on this w/c 22nd June.)

How would we end the June payment if we are 4 weekly paid and have been running alongside our payment periods?

There will need to be manual calculations to cover the period to end 31st July.  (If you are a client of Armstrong Watson’s payroll service, work is being undertaken now to design templates to assist clients where possible.  We expect to issue further guidance directly to clients on this w/c 22nd June.)

This calculator may also be able to assist with this - https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme#calc

I pay staff monthly using payroll software, but considered keeping a log of hours worked and furloughed for employees during the month and put one claim in per month, is that sensible?

Yes, that does sound sensible. If you can align your pay period with your claim period it will make the calculation much easier.

I pay weekly and last working week in June is Mon 29 June to 5th July.  Could I claim full week in JRS 1 or will I need to claim two days scheme 1 and remainder in scheme 2?

You will need to complete your claim for scheme 1 to 30th June and submit by 31st July, and then claim for the period in July under scheme 2.

If for example, I bring back a member of staff who has a high daily rate, e.g. £300/day - they come back 2.5 days a week and earn more than £2500 for the month, can the employer claim for the 2.5 days/week the member of staff didn’t work?

You will be able to make a claim on furloughed hours, so this would be usual hours worked out, less worked hours will then equal what hours you could claim for. There are a number of calculations required for this and I would suggest you run through the calculator to see what you would claim in this instance. There is insufficient detail for me to do a worked example.

We have been making our claims in working days, does this change?

Yes. There are specific ways in which you must calculate claims, but note this might be different to what you actually pay for the working hours. More examples can be found in HMRC’s guidance and in the guide Armstrong Watson has produced here

We brought back a furloughed worker for a week and furloughed her again on 10th June.  If we bring her back part time before 1st July, would we then lose the right to make any furlough claim for her for the period 10 - 30 June?

Yes you would not be able to claim in June for the period she was working.

If we find that we did not need the grant, is there a process for repayment?

HMRC have advised that where employers want to repay the monies they can view it as an over claim but if not submitting another claim then they should contact HMRC’s CJRS helpline - 0800 024 1222 

If you have made an under-claim, are there any issues with not reclaiming the money from HMRC? (The differences were minor between our workings and the calculator but we went with the smaller number to air on the side of caution.)

No. If you choose not to reclaim then that will be fine, however, if an over-claim this must be reported and rectified in your next JRS claim submission.

We have deferred our monthly PAYE/NI payments with HMRC.  I have heard that it is possible that HMRC may require you to pay the PAYE/NI on the furloughed claims, is this correct?

If you are taking advantage of the time to pay scheme, HMRC will liaise directly with you regarding their expectations on payments

What if I make a mistake with my CJRS claim(s)?

If you find you haven’t claimed enough e.g. missed an employee off etc. then you need to contact HMRC either via their webchat or by calling them.  Please click here and ensure you have all the relevant details available. 

If however, you have over claimed previously e.g. perhaps an employee returned earlier than expected after you submitted the claim, you have the opportunity to correct this in your next claim submission by following the on screen prompts.

HMRC has also now made it possible that should you make a claim under or over you can within 72 hours completely delete the claim.  You cannot amend, but delete and re-do the claim for that period.  More guidance can be found here.


For help and advice on your payroll or to discuss outsourcing, please contact us on 0808 144 5575 or email covid19help@armstrongwatson.co.uk

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