The very latest update on the Job Retention Scheme (JRS)
From the 1 July new flexibility will be introduced which is hoped will allow businesses to start to re-open with gradual employment costs. Employers will be able to allow workers to work part-time and the remaining time be furloughed. Under existing rules the furlough legislation means someone must be furloughed for a minimum of 3 weeks.
From 1 July under CJRS 2, where the employer brings an employee back into the workplace, the hours worked must be paid at 100% of their normal pay as the Chancellor stated though this could be very much a mix and match scenario and the furlough pay as now i.e. 80% or if the employer chooses to top up then fine. The Government it seems will still pay the employer National Insurance and Pension contributions on the furlough pay for July.
The new scheme will only be available for those people already furloughed in the CJRS1 scheme and the cut-off date for people being able to be furloughed and employers claiming under the new JRS will mean they must have been included in a CJRS claim submission prior to 30th June.
In theory the above would allow for example, a worker to work one week, be furloughed for 2 weeks and then work for one week, or they could work 50% of their hours each week and so on.
Flexible furloughing from 1 July
- Employers can bring back to work employees that have previously been furloughed in scheme CJRS1 i.e. furloughed for the minimum 3 weeks anytime between 1st March and 30th June, for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked.
- Employers will be able to agree any working arrangements with previously furloughed employees.
- When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week. This is a minimum period and those making claims for longer periods such as those on monthly or two weekly cycles will be able to do so.
- To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing.
- Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. Further details will be included in future guidance.
- Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period.
- For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.
- Further guidance on flexible furloughing and how employers should calculate claims will be published on 12 June.
Closure to new entrants from 30 June
- The current scheme (CJRS1) will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June.
- This means that the final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June.
- Employers will have until 31st July to make any claims in respect of the period from 1st March to 30 June.
- From 1 July the scheme will only be available to employers that have previously used the CJRS1 scheme in respect of employees they have previously furloughed.
- From 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. This is necessary to reflect the forthcoming changes to the scheme.
- The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS.
- Employers can continue to make claims in anticipation of an imminent payroll run, at the point payroll is run or after payroll has been run.
- Employers will be able to make their first claim under the new scheme from 1 July.
Futher changes from 1 August
From 1 August there will be a further change; flexibility will still be encouraged as in July, but the Government will start to reduce its financial support; they will ask employers to pay the National Insurance and pension contributions on all the pay made to the employee. The JRS financial support to employers will also reduce further from 1 September to 70% therefore employers will contribute the 10% on the 80% of salary and from 1 October (the final month of the scheme) the Government will contribute 60% of wages so the employer will pay 20% on the 80%.
I will be digesting the new guidance expected on 12th June over the coming week-end and will provide further support early next week.