The Coronavirus Job Retention Scheme (CJRS) has been amended, updated, and extended in many ways since its introduction on 20th March 2020. As the scheme begins to wind down flexibly and gradually, supporting business until October with 'flexible furlough' enabling employees to work the portion of their hours that best suits the needs of the business whilst enabling employers to claim a grant under CJRS for periods during when the employees remain on furlough.
Flexible working in a nutshell
Employers were able to bring back employees from the 1st July 2020 who had previously been furloughed for any amount of time and shift pattern, whilst still being able to claim the grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.
Flexible furlough arrangements must be agreed, in writing, with the employee. The employers will be required to report the hours worked, as well as the usual hours an employee would be expected to work in a claim period.
How much does the Government pay?
Until 31st August 2020, employers were able to claim a grant of 80% of the wages of employed placed on furlough leave, up to £2,500 per month gross.
From 1st September, employers will only be able to claim a grant of 70% of the employee's wages (to a cap of £2,187.50) for the hours they are on furlough. The employer will be required to top up the additional 10% wages, to the original cap of £2,500.
From 1st October, this will reduce to 60% of the employee's wages (to a cap of £1,875) for the hours they are on furlough. The employer will be required to top up the additional 20% of wages, to the original cap of £2,500.
Where the employee is working under the flexible furlough scheme, the cap set out above will be proportionate to the hours when the employee is on furlough and not working. Employers will be able to claim for the hours not worked by the employee that would have made up their usual hours, but for furlough.
Job retention bonus
To reward and incentivise employers who keep on their furloughed employees, the Chancellor introduced a new Job Retention Bonus. The Government will offer a one-off fixed payment of £1,000 to UK employers for each furloughed employee who remains continuously employed through to 31st January 2021. The bonus amount is fixed at £1,000, irrespective of the employee's earnings. Employers can expect to receive the bonus payments from February 2021, which will be paid directly to the employer.
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Key takeaway points
In September, the Government will pay 70% of wages to a cap of £2,187.50. Employees must fund the remaining 10% of wages to make up 80% (capped at £2,500) and employer NIC/auto-enrolment pension contributions.
In October, the Government will pay 60% of wages to a cap of £1,875.00. Employees must fund the remaining 20% of wages to make up 80% (capped at £2,500) and employer NIC/auto-enrolment pension contributions.