Update: Coronavirus Job Retention Scheme (CJRS)
As previously announced, the CJRS has been extended to 31 October 2020 and will be changed to a flexible arrangement from 1 July 2020 to allow employees to resume part-time working.
The Chancellor and his advisers will be gritting their teeth as drawing a line in the sand by tapering and then closing the CJRS on 31 October 2020 will force the hand of employers to consider their options. It is likely that redundancies will start to climb from that date as will the number of the unemployed.
A bullet-point summary of the changes announced is set out below:
- The CJRS will close to new entrants on 30 June 2020. The final date employers can furlough staff for the first time will be 10 June 2020.
- From 1 July 2020, employers can bring back employees to work part-time, for any amount of time and any shift pattern. Any claim under CJRS will be limited to normal hours not worked.
- June/July 2020 – government will continue to pay 80% of costs up to £2,500 cap
- August 2020 – government will pay 80% of wages up to £2,500 cap, but employers will have to cover employers’ NIC and pension costs for the hours the employee does not work.
- September 2020 – government will pay 70% of wages up to reduced £2,187.50 cap. Employers will pay employers’ NIC, pension costs and 10% of wages to a total cap of £2,500.
- October 2020 – government will pay 60% of wages up to reduced £1,875 cap. Employers will pay employers’ NIC, pension costs and 20% of wages to a total cap of £2,500.
- The cap will be proportional to hours not worked.
- The CJRS will be closed-down 31 October 2020.
The above changes to a flexible approach cloak a raft of detail that government is not publishing until 12 June 2020. Those responsible for making CJRS claims will need to wait for these further clarifications as they will explain how employers should calculate claims.
We will be integrating the changes into our payroll services when they are available and will contact clients if further details regarding part-time working are to be introduced.
Clearly, there are planning considerations. Please call if you have employees on furlough and you need to consider your options; for part-time working up to 31 October and longer-term considerations after this date.
Veracity are here and available to help you and your businesses through this extremely challenging period.