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1 June 2020

Latest Furlough scheme changes

 

Chancellor Rishi Sunak announced further changes to the Furlough (or CJRS) Scheme on 29th May which will run to the end of the scheme in October.  Here are the key headlines from the changes.  

1. The government published further changes to the furlough scheme on Friday – what are the key changes employers need to be aware of?

a. The scheme will remain in its current state in respect of the amount employers can reclaim, i.e. the 80%, until the end of July. From 1st August, employers will be expected to pay for the employer National Insurance Contributions (ER NICs) as well as the pension contributions for any furlough claims and will no longer be able to reclaim this via the scheme. From September, employers will be asked to make these payments, plus at least 10% of the furloughed wage (alongside a government contribution of 70%) and from October, this will increase to a minimum 20% employer contribution, along with the National Insurance and pension contributions, with 60% from the government.

Bear in mind that the overall wage cap of £2,500 monthly (proportional to the hours worked) still applies to all of the above scenarios and the scheme is set to end at the end of October.

2. Will employers be able allow part-time work via the furlough scheme?

a. Yes – from 1st July, the government will allow ‘flexible furloughing’. What this means is that employees will be able to work part-time for the employer, and the furlough scheme can still be used for any amount of their normal hours that they don’t work. The employer will need to pay in full for the hours that are worked. So, if someone normally works 40 hours per week, the employer could bring them back for 20 hours per week, and furlough them for the remaining 20 hours. The employee should receive full pay for the 20 hours worked, and 80% of pay for the remaining 20 hours, which the employer will be able to claim back via the scheme (N.B. You wont be able to reclaim any amount for the hours worked).

The information received so far from the government suggests that the hours can’t be variable as they’ve said any agreement with the employee should cover at least one week, and the minimum claim period will be a week. We also know that any agreements need to be in writing and the information the government will need to see will be the normal hours worked and the actual hours worked, as well as the amount of furloughed hours claimed for. We should have more information on this and how to calculate claims by 12th June.

3. Are there any areas of caution?

a. Yes – the last date employers will be able to furlough anyone new is from 10th June. This is because the scheme is going to close for any new entrants as of 30th June and any new entrants must have already been furloughed for a minimum period of 3 weeks. This would suggest that anyone previously furloughed can still access the scheme after this date, providing they have already completed a minimum 3-week furlough period and who a claim has been submitted for previously, however we’re expecting more information around this and the other changes by 12th June.

It’s also worth noting that employers will have to submit claims for any periods of furlough up to 30th June by 31st July at the latest and also that from 1st July, claim periods will no longer be able to overlap months, which is due to the changes to the scheme from this point.

4. Where can I find more information?

a. There continues to be a lot of information on the government website and a comprehensive list of these is published on our other pages. However, a useful factsheet is available on the government site via this link.

If you would like to hear me discuss all of the above with Laura Bolton of Simple Accounting NW Ltd, please have a watch of the video below (with apologies for the video quality at Laura's end):

 

Contact me for more information or if you have any questions as a result of the latest changes.  Email: info@embrace-hr.co.uk or ring Emma on 07967 588907

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