NEWS & RESOURCES

Furlough Scheme Updates and Implications – June 2020

Coronavirus: What’s next? Flexible Furlough
[ Including: 12 June 2020 Update ]

Following the Chancellor’s announcement on Friday 29th May and subsequent update of the 12 June 2020, the Chancellor has confirmed the following updates to the Coronavirus Job Retention Scheme (CJRS) – Furlough Scheme: 

  • The scheme would remain open until October 
  • Furloughed employees will still receive 80% of their pay as a minimum (capped) but employers will increasingly have to help fund the scheme (see below) 
  • From 1st July a new Flexible Furloughing option will be introduced. 

The implications for employer contributions

June and July

The scheme will continue as before with the government paying 80% of wages up to a cap of £2,500 as well as employer National Insurance and pension contributions for the hours the employee doesn’t work. Employers will have to pay employees for any hours they work (in July).

August

80% of pay will still be subsidised by the government up to a cap of £2,500, but employers will be asked to pay employers NI and pension contributions ie for the average claim approximately 5% of total employment costs they would have incurred had the employee not been furloughed.

September and October

Employers to start paying towards cost of furloughed wages:

  • September: 70% funded by the government up to a cap of £2,187.50 for the hours the employee doesn’t work.  Employers will pay employers NI and pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
  • October: 60% funded by the government up to a cap of £1,875.00 for the hours the employee doesn’t work.  Employers will pay employers NI and pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
  • The cap on the furlough grant will be proportional to the hours not worked.

The scheme will end on 31st October 2020.

 

Flexible furlough

In order to help people get back to work, from 1st July you will now have the flexibility to bring previously furloughed employees* back to work part-time, with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. 

*the scheme will be closed to NEW entrants (with the exception of those on statutory maternity/adoption or paternity leave) on 30th June 2020. Therefore, the final date you can furlough an employee for the first time is 10th June 2020 (to ensure the 3-week minimum claim).  

Those on statutory maternity/adoption/paternity leave and who are due to return in the coming months, then the deadline of the 10th June will not apply.  It would be unfair and discriminatory for this group of employees to not be able to join the scheme purely on the basis of exercising of a statutory right.  

An example of using the flexible furlough scheme and working part time: a full time employee is brought back to work to resume their normal work on 2 days per week and will be paid for those 2 days as normal by the employer and they will be furloughed for the remaining 3 days per week for which 80% grant can be claimed from the government.  

This is just an example; you can decide the hours and shift patterns that your employees will work on their return as long as you pay them in full for any hours they are working. There is no minimum time that you can furlough staff for.  

Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing.  

If employees are unable to return to work or you do not have any work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules. 

Claiming

Flexible furloughing: The Government have announced that with the new flexible furlough scheme, there will be no minimum amount of time that an employee can be on temporary leave.  However, any furlough arrangement agreed between employer and employee and reported in a claim to the HMRC must still cover a period of at least one week. 

You will have to submit details of the usual hours an employee would be expected to work, and the actual hours worked. 

Employers will have until 31st July to make any claims in respect of the period to 30 June. 

Self employed

The self-employment income scheme has also been extended and will be re-opening in August for a final grant; a single instalment of 3 months’ worth of 70% of average monthly earnings up to a maximum of £6,570.

 

Further information

For more articles and ongoing updates visit the HR Solutions’ dedicated page ‘Coronavirus Advice and Guidance for Employers’.

HR Solutions are here to provide you with support and advice on any employment related issues; to find out more call us on 0844 324 5840 or contact us online.

SHARE THIS:

Instagram

GET IN TOUCH

Got questions? Looking for advice?

RELATED RESOURCES

Explore our comprehensive library of related resources to gain valuable insights, expert tips, and helpful tools for optimising your HR practices.

Request a Call from an HR Advisor

Our expert HR Advisors are here to assist you. To schedule a complimentary 30-minute call, please complete the form below. One of our advisors will reach out within 24 hours to either conduct the consultation or arrange a suitable time.

SIGN-UP FOR UPDATES

Receive all the latest industry insights, expert tips and exciting updates from HR Solutions, straight to your inbox.

Strategic HR thinking whitepaper

Our latest HR whitepaper offers an in-depth analysis and strategic framework aimed at transforming Human Resources into a pivotal element of business success in the rapidly evolving corporate environment of 2024.

PARTNER REGISTRATION

Register your details below and we will contact you regarding how HR Solutions can support your organisation.

MAKE A GENERAL ENQUIRY

We’re here to assist you with any questions or enquiries you might have. Simply fill out the form below, and our dedicated team will get back to you.

var iframe = document.getElementById('pageurl-general-popup-6'); iframe.src = iframe.src + "?Form_Completion_Page=" + window.location.pathname + "&" + window.location.search.substr(1);

REQUEST A PROPOSAL FROM US

We’re here to assist you with any questions or enquiries you might have. Simply fill out the form below, and our dedicated team will get back to you.

BOOK YOUR PLACE

Please complete the form and one of our team will call you back to discuss your query/booking.

Request your free trial

Register your details below and we will contact you about your 30 day free trial of the HR Knowledge Base.

REGISTRATION FORM

Register your details below and we will contact you about access to the HR Knowledge Base.  As part of your approved industry membership organisation you can get access to the HR Knowledge Base, created by Business HR Solutions, which is the go-to resource for thousands of business owners and managers across the UK.

2023/2024 SME BUSINESS SURVEY

Our latest 2023/24 SME Business Survey sheds light on the intricate dynamics shaping the SME sector and unveils critical insights that can guide businesses toward sustainable success.

IF YOU WISH TO PURCHASE HR ADVICE LINE TIME, PLEASE COMPLETE THE FORM BELOW.

HR Solutions are here to help. We offer a standard hourly rate package for ad hoc HR advice which means you can pay for what you need, whenever you need it, and then quickly get advice. Our highly experienced advisors are on hand to provide you with practical employment advice to help you manage your workforce.  You can purchase HR Advice Line time now, and the time purchased will be valid for 12 months.