Update: 1st September 2020
Further changes announced to the Coronavirus Job Retention Scheme begin today
From today until the end of September, the government will pay 70% of a furloughed employee's wages up to a cap of £2,187.50. Employers will now top up employees' wages to ensure their staff are receiving at least 80% of their wage up to a cap of £2,500, as well as pay ER NICs and pension contributions for the time their staff are furloughed.
Visit the gov.uk website to find out more.
Update: 3rd August 2020
Job Retention Bonus Scheme announced
The government recently announced a Job Retention Bonus Scheme, which will provide additional financial support to employers who keep furloughed employees in 'meaningful employment', when the government’s Coronavirus Job Retention Scheme is no longer available from 31st October this year. The Job Retention Bonus is a one-off payment of £1,000 to employers, paid for every employee they have previously claimed for under the scheme. The employees must have remained continuously employed all the way through to 31st January 2021. You can find out more information about the Job Retention Bonus here. Full guidance will be published by the end of September.
Update: 30th June 2020
Changes to the Coronavirus Job Retention scheme begin 1st July 2020
Planned changes to the Coronavirus Job Retention Scheme begin tomorrow, Wednesday 1st July 2020. Starting from this date, employers will be able to bring back furloughed employees part-time to suit the needs of the business.
For more information on this change, as well as further changes beginning on Saturday 1st August 2020, visit the HMRC website.
Update: 8th June 2020
Further updates to the Coronavirus Job Retention Scheme - end of claims period and important dates
On Monday 8th June 2020, the government announced further changes to the Coronavirus Job Retention Scheme. This update focused on important dates that employers need to be aware of moving forward:
30th June: The scheme will close to anyone who hasn't been furloughed for three weeks by this date. From 1st July, employers will only be able to claim for employees that have been furloughed for a full three-week period by the end of June.
10th June: This is the last date that employers can furlough an employee who hasn't previously been furloughed and still be eligible for the scheme beyond June 30th. To qualify, employers and the staff they intend to furlough must agree their furlough period will begin on or before 10th June to ensure the minimum three-week period is completed by 30th June.
31st July: Employers will then have until this date to claim for any periods of furlough up until 30th June.
1st July: From this date forward, the number of employees you can claim for in a period cannot be higher than the maximum number you have claimed for in a previous period. However, employers will also be allowed to bring furloughed employees back part-time to suit the needs of the business.
1st August: From this date onwards, employers will be expected to contribute to the wages of furloughed employees until the scheme ends on 31st October 2020.
Further information on the future of the scheme will be announced on Friday 12th June.
Update: 1st June 2020
Updates to Coronavirus Job Retention Scheme - bringing furloughed employees back part-time from 1st July
From 1st July 2020, the Coronavirus Job Retention Scheme will become more flexible to allow employers to bring furloughed staff back to work on a part-time basis. Employers will still receive a grant for the time their part-time employees spend not working as part of this arrangement.
Employers will select the hours and shift patterns their staff will work upon their return, with the CJRS continuing to cover 80% of their wages for any normal working hours they do not work until the end of August 2020. This change allows employees to work as little or as much as the business needs as the country adapts to the “new normal,” and includes no minimum time for furlough. This shift, which was originally planned for 1st August 2020, has been moved forward one month to offer greater flexibility to employers and encourage people to get back to work.
The working arrangements must be agreed between the business and their employees in writing and must cover at least one week of work. For example, when claiming funding for furloughed hours under a part-time arrangement, employers will need to claim for a minimum of one week. However, employers can opt to make claims for longer periods, such as monthly or two weekly cycles. To make a claim, employers must submit data on the usual hours an employee would be expected to work, versus their actual hours worked during the claim period.
What if I don’t have any work for my furloughed employees?
If a furloughed employee is unable to return to work or you have no work to give them at this time, they can stay on furlough and you can continue to claim for 80% of their full-time wages under the existing rules for CJRS.
Tapering of government support
To reflect the country's return to work, government support as part of CJRS will begin to taper off from August 2020. In June and July, the government will continue to pay 80% of a furloughed employee's salary. However, from August employers will be expected to make a modest contribution - although furloughed employees will still receive 80% of their wages.
The scheme updates mean that the government will:
- June and July- The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything
- August - The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed
- September - The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed
- October - The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed
For further details, visit the gov.uk website.
How to furlough an employee/s
Using the new HMRC portal, employers must register the names and salary details of the employees they wish to furlough. If you’d like to furlough 99 individuals or less, the employee’s data must be entered into the portal directly. For 100 or more furloughed employees, the data must be compiled and uploaded into a .xls, .xlsx., .csv or .ods document.
To make a claim, employers must provide:
- National Insurance Number
- Claim period and amount
- The employee/payroll number
Some employers have reported difficulty accessing the system because they do not have an active PAYE enrolment. To make a direct claim, employers must:
- Have (or create) a Government Gateway account, which can be done here
- Enrol for PAYE online, which can be done here
Click here for a step by step guide to furlough for employers
Click here for employee guidance on the furlough process
Click here for an example furlough letter
Further guidance for employers regarding furlough
Parental and adoption leave
Furloughed workers planning to take paid parental or adoption leave will be entitled to pay based on their usual earnings rather than a furloughed pay rate.
Furloughed staff should be paid full wage while training
If staff are training while furloughed, they need to be paid at least minimum wage during this time. If the furloughed rate is less than minimum wage, employers are expected to make up the difference for time spent training, even if this means more than 80% of their wage will be subsidised.
This includes apprentices, who need to be paid their full hourly rate (which is often less than minimum wage if they are under 19) for training while on furlough. However, staff that are being paid more than minimum wage while furloughed do not need to have their wages topped up by their employer.