Navigating the new normal

Flexible Furlough Scheme

All content on this page is correct as of June 2, 2020

On Friday 29 May 2020, the Chancellor Rishi Sunak set out a number of changes to the Coronavirus Job Retention Scheme (CJRS), which will take effect over the coming months.

The Chancellor confirmed that from August 2020 employers will be required to start contributing under the scheme:

  • from August they will have to pay employer’s national insurance and pension contributions;
  • from September they will also have to pay 10% of wage costs; and
  • from October they will have to pay 20% of wage costs.

The CJRS is currently planned to expire at the end of October and the Government has confirmed that it will close to new entrants from 30 June 2020. From that point, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June 2020, meaning the final date by which an employer can furlough an employee for the first time and claim under the scheme will be 10 June 2020.

The Government has also confirmed that part-time working will be allowed under the scheme from 1 July 2020, brought forward from August 2020 as previously announced.

Together with its guidance, HM Treasury has published a factsheet which gives some more detail of how ‘flexible furloughing’ will be implemented. It states that:

  • from 1 July, employers will be able to bring back to work any employees who have previously been furloughed for any amount of time and any shift pattern;
  • the employer will still be able to claim under the CJRS for such employees’ normal hours not worked but will have to pay in full for any hours worked; and
  • the employer will be responsible for tax and employer’s NI contributions on pay for any hours worked.

To be eligible for the grant:

  • employers will have to agree with their  employees any new flexible furloughing arrangement; and
  • confirm that agreement in writing.

Further guidance on flexible furloughing and how employers should calculate claims is due to be provided on 12 June 2020. If you have any further questions relating to the content of this update, then please do get in touch with our Employment team who would be happy to assist you further.

We are hosting a webinar to discuss these developments and what they mean for you. Click here to book your place and to register for a recording and the slides.

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of June 2, 2020.

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