Update to the Coronavirus Job Retention Scheme and Flexible Furloughing

Following the Chancellor’s announcement on the future of the Coronavirus Job Retention Scheme, on Friday, 29 May 2020, the Government has recently published further guidance. 

We have summarised the key points below:

• The Scheme will continue until the end of October, with furloughed employees continuing to receive 80% of their salary (up to £2,500 a month).
• The Scheme will be closed to new applications from 30th June. This means that the last day an employee can start a period of furlough for the first time is 10th June, so that the employee meets the minimum requirement of being furloughed for three-weeks before a claim is made to HM Revenue and Customs.
• From August, the Government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance contributions and pension contributions for the hours the employee does not work.
• In September, the Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay the employer’s National Insurance contributions and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. This means that there is no actual difference for the employee.
• In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay National Insurance contributions and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. This means, again, that there is no actual difference for the employee.
• From 1 July, ‘flexible furloughing’ will be introduced, which will allow employers to bring employees who have previously been furloughed back to work for any amount of time, while still being able to claim furlough payments in respect of their normal hours not worked.
• Employers must agree any new ‘flexible furlough’ arrangements with employees and confirm that agreement in writing.

What should employers be thinking about now?

One of the key points of the new guidance is the new deadline of 10th June to furlough employees for the first time.  This means that, if an employer wants to use the furlough scheme, they must act now.  Otherwise, this may not be available at a later date.  This deadline will also apply to employers seeking to use ‘flexible furloughing’ for employees who they have not previously furloughed.  Employers who may want to use ‘flexible furloughing’ will have to act quickly to ensure suitable agreements can be put in place with employees before the 10th June.

If you need any assistance with putting suitable furlough agreements in place with employees, or require further advice on the Coronavirus Job Retention Scheme feel free to contact Herrington Carmichael’s Employment Group on 0118 977 4045 or [email protected].

 This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.