Coronavirus Job Retention Scheme update

Our team: Mike Tremeer, Michael McCartney, Taj Rehal

Since it was announced on 20 March 2020, the Government’s Coronavirus Job Retention Scheme (CJRS) has seen various revisions and updates.  Our previous summary of the CJRS and the Government’s guidance can be seen here.

The latest CJRS factsheet published by the Government indicates that, as of 24 May 2020, 1m employers had taken advantage of the scheme, apparently in order to save 8.4m jobs.  The total value of the claims made by employers under the CJRS is apparently £15bn.

On Friday 29 May 2020, Chancellor Rishi Sunak revealed further changes and details of how the CJRS will operate between 1 July 2020 and its closure on 31 October 2020.  As previously, full details and detailed guidance are not yet available but headline terms have now been confirmed.

Our summary of the pertinent points is as follows:

  1. in order to benefit from the CJRS going forward, employees must have been placed on furlough leave for at least the minimum period of three weeks before 1 July 2020.  In practice, this means that employees must be placed on furlough leave by 10 June 2020 in order for the employer to make a claim under the CJRS. Those employers that wish to take advantage of the scheme but have not yet done so must therefore act fast;
  2. from 1 July 2020 “flexible furlough” will apply.  This will allow employees to work part-time (or reduced hours compared to their “usual hours”) and to be placed on furlough leave for the unworked hours – it is no longer “all or nothing”.  Employers will be able to claim up to 80% of the employee’s costs for the furloughed/unworked hours only (for now – see further below);
  3. from 1 August 2020, employers will not be able to reclaim the cost of employer national insurance contributions or the employer’s pension auto-enrolment pension contributions from the CJRS.  They will be required to bear this cost themselves;
  4. from 1 September 2020, employers will only be able to claim up to 70% of the employee’s wage costs for furloughed hours.  Employee’s remain entitled to receive up to 80% of their pay (up to £2,500 per month) meaning that employers must fund the 10% difference;
  5. from 1 October 2020, employers will only be able to reclaim up to 60% of the employee’s wage costs for furloughed hours, employers having to fund the 20% deficit; and
  6. the CJRS will close on 31 October 2020.

Further guidance regarding these changes will be published on 12 June 2020.

In addition to the CJRS (which covers employees), the Government has announced that self-employed individuals will be able to apply for a second and final grant in August 2020.  This will pay up to 70% of average earnings (up to £6,750).

View by date:

View by author:

Would you like to hear more?