In addition to our guide, Everything SMEs Need to Know about Furlough, which was posted on 24 June, we are now pleased to present a very simple quick guide below.
The Coronavirus Job Retention Scheme (CJRS) helps employers cover the costs of keeping individual employees on furlough, each for periods of three weeks or more.
Currently employers can claim under the CJRS for 80% of the employee’s usual wage (up to £2,500 per month) plus the employer’s NIC on those wages and the employer’s minimum contributions to the workplace pension, but this is about to change from:
· 1 July – employees can be furloughed for flexible periods with no minimum.
· 1 August – CJRS will not cover the employer’s NIC or pension contributions.
· 1 September – CJRS will cover 70% of usual wages capped at £2,187.50 per month, but no employer’s NIC or pension contributions.
· 1 October – CJRS will cover 60% of usual wages capped at £1,875 per month, but no employer’s NIC or pension contributions.
· 1 November – no further support will be paid for furlough periods after 31 October.
Employers must continue to pay their employees at least 80% of their usual pay for furlough periods. For periods the employee is working they must be paid in line with their agreed employment contract, at rates above or equal to the National Minimum wage or National Living Wage, according to their age.
Employers must not change the terms and conditions of employment contracts to reduce furlough pay to the amount of CJRS grant.
To be included in a CJRS claim for furlough periods from 1 July onwards, the employee must have been furloughed for a period of at least three weeks at some point between 1 March and 30 June 2020, with a few exceptions. Claims for furlough periods to 30 June must reach HMRC by 31 July.
An employer won’t be able to use the CJRS from 1 July if they have not already made CJRS claims for their employees for earlier periods. Also the maximum number of employees the employer can claim for in July and beyond is limited to the maximum number of employees included in claims for periods up to 30 June 2020.
Those are the bare bones of the new flexible furlough scheme, but there is much more detail to digest on how to calculate an employee’s usual hours and usual wages. A good deal of record keeping will also be required to keep track of what hours each employee has worked, or been furloughed, within each pay period. For more detail follow the link below.