Changes to the Coronavirus Job Retention Scheme from June onwards
Updated CIPD guide to furlough
In response to the changes announced by the Chancellor to the CJRS on furlough, the CIPD have updated their helpful guidance document, the key points of which are summarised below.
Final date for new entrants to furlough scheme is 10 June 2020
The CJRS is set to continue until October 2020 however, it is closing to new entrants to the scheme in June. This means that the final date by which an employer can furlough an employee for the first time is 10 June 2020. This will ensure that one complete furlough period of 3 weeks has been implemented by 30 June 2020.
Accessing the CJRS from 01 July 2020
The updated Government Guidance states that 'From 1 July employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30 June 2020'.
From 1 July 2020 the scheme becomes more flexible for the period up to 31 October 2020. CIPD have produced a clear table of the key dates within the ongoing scheme. The scheme applies to employers currently using the scheme for previously furloughed employees. There will be the ability in the scheme to bring back employees on a part time basis with employers responsible for paying wages while in work. The Government Guidance outlines the following stages:
June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.
Further guidance from the government on flexible furloughing and how employers should calculate claims will be published on 12 June 2020.
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