On 12 June 2020, HM Revenue and Customs published further updates to the official guidance on the Coronavirus Job Retention Scheme (CJRS) – including the flexible furlough. The updated guidance now includes details of how the scheme is to be wound down between July and October – as announced by the Chancellor of the Exchequer on 29 May.

The updated guidance reflects that, from 1 July, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks, meaning that the last date on which employers could furlough employees for the first time was 10 June.

Employers will be able to introduce ‘flexible furlough’ from 1 July, including part-time arrangements. The minimum furlough period (currently three consecutive weeks) will no longer apply – flexible furlough agreements can last for any period.

The new guidance states that the employer will be required to ‘keep a new written agreement’ when implementing flexible furlough. Employers will have to pay employees in full for hours worked (with CJRS grants remaining available for normal hours not worked). The updated guidance includes a worked example of how to calculate pay for a flexibly furloughed employee.

CJRS grants will be tapered over the next few months, as announced by the Chancellor on 29 May:

  • From 1 August, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500;
  • From 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50); and
  • From 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).

The updated guidance also acknowledges the announcement made by HM Treasury on 9 June that the 10 June cut-off for furloughing employees for the first time will not apply to those returning from family-related leave. Employees returning from maternity, adoption, paternity, shared parental or parental bereavement leave will still be eligible for the furlough scheme even if they have not previously been furloughed by 10 June, provided that the employer has used the furlough scheme for other eligible employees by that date.

You can red the full guidance here.

15th June 2020

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