On Friday evening the Government issued its long awaited guidance setting out changes to the Coronavirus Job Retention Scheme ("CJRS").

From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.

The attraction of the new arrangements for employers is that employees can be moved in and out of furlough to meet demand or to undertake specific tasks (such as preparing the workplace for return after lockdown).

The other main point for employers to note is that the level of Government grant will reduce on a sliding monthly basis as described below.

From 1 August 2020, the level of Government grant will be reduced each month.

To be eligible for the grant, will require to make up the difference and ensure that furloughed employees receive 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed.

The timetable for changes to the scheme is set out below.

In terms of calculation, the CJRS wage caps will be proportional to the hours an employee is furloughed.

For example, an employee is entitled to 60% of the £2,500 cap if they are placed on furlough for 60% of their usual hours:

  • There are no changes to CJRS grant levels in June.
  • For June and July, the government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
  • For August, the government will pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay the employer National Insurance and pension contributions for the hours worked by the employee.
  • For September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay employer National Insurance and pension contributions, and, require to top up employees' wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
  • For October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay employer National Insurance and pension contributions and top up employees' wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.

The table below shows Government contribution, required employer contribution and amount employee receives where the employee is furloughed 100% of the time.

Wage caps are proportional to the house not worked.

July August September October
Government contribution: employer NICs and pension contributions Yes No No No
Government contribution: wages 80% up to £2,500 80% up to £2,500 70% up to £2,187.50 60% up to £1,875
Employer contribution: employer NICs and pension contributions No Yes Yes Yes
Employer contribution: wages – – 10% up to £312.50 20% up to £625
Employee receives 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month

The information and opinions contained in this article are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.

Originally published 14 June 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.