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Up-to-date guidance on Furlough

[Guidance is changing quickly and this was correct at time of posting]

On 29 May the Chancellor made good on his promise to announce details, by the end of May 2020, of how he would change the Coronavirus Job Retention Scheme (CJRS) for the period from August to October.

Although, in some respects he did, and he did not.

Some details will not be revealed until at least 12 June. Also, some of the changes to the CJRS will be made earlier than expected, starting with a key trigger date of 10 June.

So far as the usual published guidance is concerned the changes that have been made are minimal.  A standard announcement has been placed at the start of each of the relevant documents in the usual collection.

A link is then provided to the press release issued on 29 May, to coincide with the announcement:

https://www.gov.uk/government/news/chancellor-extends-self-employment-support-scheme-and-confirms-furlough-next-steps

That, in turn, provides a link to a “fact sheet” which provides more information about the changes (page 2 onwards):

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/888764/Factsheet_for_SEISS_and_CJRS_schemes.pdf

Flexible furloughing

This concept is being introduced on 1 July; a month earlier than we were previously led to believe, though not all the details will be available until 12 June at the latest.

The idea is that an employer will be able to agree hours and shift patterns with an employee in order to ease them back from furlough. An employee can work as much or as little as an employer needs them, with no minimum amount of time for them being counted as on furlough.

If work is undertaken then the employer will have to cover that cost. If an employer has no work for an employee to do then they can remain on furlough as before.

The agreed working arrangements must be in place for a minimum of one week and evidenced in writing.

Closure to new entrants

The closure to new entrants, while stated to be from 30 June, is effective from 10 June.

Only those who have been furloughed for a full three-week period prior to 30 June will be regarded as qualifying for the CJRS.

It would appear that employees who have been furloughed on a rotational basis will not be required to have been furloughed for all of the three weeks prior to 30 June.

The factsheet talks of employees having been furloughed for “a” period of three weeks prior to 30 June and not “the” period of three weeks before.

Further, 10 June is stated to be the final date by which an employee can be furloughed for the “first” time.

Making claims

From 1 July claims will no longer be made for overlapping months. This is understandable bearing in mind the fairly fundamental changes to the nature of the CJRS effective from that date.

However, it will still be possible to make claims in anticipation of what will happen for the remainder of a month, thus avoiding claims having to be submitted on the final day of the month.

Guidance on how to shape the claims will be issued by or on 12 June.

Government contribution

Starting in August the funding provided by the government will start to decrease with employers expected to fill the gap as follows:

  • in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay employer National Insurance Contributions (ER NICs) and pension contributions;
  • in September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours an employee does not work – employers will pay ER NICs, pension contributions and the missing 10% of wages;
  • in October, the government will pay 60% of wages up to a cap of £1,875 for the hours an employee does not work – employers will pay ER NICs, pension contributions and the missing 20% of wages.

The cap on the furlough grant will be proportional to the hours not worked.

[There is a further update to this post, click here]