Changes to Coronavirus Job Retention Scheme (CJRS) from 1st July

On 12^th June and as promised HMRC provided updated guidance on the Coronavirus Job Retention Scheme (CJRS).

In summary:

• From 1^st July 2020 employers will not be able to furlough anyone new (unless they are returning from family leave). In order to be furloughed after 1^st July, the employee must have previously been furloughed for a minimum period of 3 weeks. This means that the last time an employee could be furloughed for the first time was on 10^th June. No new employees can be furloughed.
• The employee does not have to be on furlough at the end of June, they just have to have been furloughed before. For example if an employee was furloughed in March and then returned to work, they can still be furloughed again before the end of the CJRS.
• An employee returning from family leave e.g. maternity, adoption, parental leave, can still be furloughed even though they have not been on furlough before 1^st July 2020. The only condition is the employer has already used the furlough scheme.
• Employers can choose to implement flexible furlough from 1^st July 2020. Employers do not have to implement flexible furlough.
• The minimum furlough period of 3 weeks does not apply for flexible furlough after 1^st July. Flexible furlough can be for any period. If an employee is put on furlough before 30^th June they will still need to be furloughed for the minimum 3 week period.
• The employer must keep updated written agreements when putting flexible furlough in place. Employers must put in place a new written agreement with the employer for each period of furlough or flexible furlough. The employer must keep written records of the agreement for 5 years, and also the amount of hours the employees work and are not working (furloughed).
• The maximum amount of employees to be put on flexible furlough cannot be greater than the maximum number of employees an employer has claimed for under any claim ending on 30^th June 2020. For example If the maximum employees on furlough in any one CJRS claim is 10, the maximum that can be put on flexible furlough is 10.
• During flexible furlough, the employer must pay the employee in full for the hours worked. The CJRS grant will remain available to claim for the hours not worked. For example if an employee is brought back to work on flexible furlough 2 days per week – the employer must pay in full for the 2 days worked. The employer can claim the CJRS grant for the 3 days not worked.
• An employer can bring an employee back for any amount of hours or any work pattern during flexible furlough and this can vary week on week.
• Employees can be taken on and off furlough and can enter into more than one flexible furlough agreement.
• Employers will need to agree flexible furlough arrangements with employees.
• Regardless of whether flexible furlough is used, employers will have to start to contribute to the CJRS grant from 1^st August 2020 as follows: 1^st August: employer NI and employer pension contributions only (cap £2,500); 1^st September: 10% wages, CJRS: 70% (cap £2,187.50); 1^st October: 20% wages, CJRS: 60% (cap £1,875).
• 31^st July is the last time you can submit claims for periods on or before 30^th June.

Please do not hesitate to get in touch if you need help navigating the Coronavirus Job Retention Scheme, changing terms or making redundancies. please contact our Employment Partner, Kate Brooks on 01202 525333 or email  kate.brooks@ellisjones.co.uk.