COVID-19 – Updates To The Job Retention Scheme

The temporary furlough scheme has been in full swing since the 1st March 2020. The scheme is designed to support all employers’ whose operations have been severely affected by Coronavirus, whatever the industry!

The scheme was run for an initial three months but has since been extended to October 2020. However, it’s important to note that from July, there will be changes to the current scheme.

This grant is available for employees who have been asked to stop working but are still being kept on the payroll. Changes to the scheme which are due to be put in place from July  include:

  1. Employers will be able to put staff on part-time furlough, claiming the CJRS grant for a portion of their salary.
  2. Employers will only be able to claim from July if they have claimed previously and furlough must have started by 10th June in order to remain eligible from 1st July.
  3. There will be a limit to the number of staff who can be included into the claim, and this will be based on the maximum staff ever included in any single claim prior to the 1st July.
  4. From the 1st August, the grant will no long cover the cost of NI or pension contributions and employers will be expected to cover those costs.

The grant amount will begin to decline from August onwards as follows:

June / July – 80% of wages up to a cap of £2,500 will be paid alongside NIC and pension contributions for the hours the employee does not work – However employees will need to pay for those part time hours that the employee does work.

August – An 80% wage grant will remain in place for August but employers will be expected to pay the NIC and pension contributions.

September – At this point the government begin to strip back by offering a grant for 70% of wages up to a cap of £2,187.50 for the hours an employee does not work. Again, employers will be expected to pay the NIC’s, pension contributions and an additional 10% of wages to make up the total 80% at a cap of £2,500.

October – In the last month of the furlough scheme, the government will pay just 60% of wages which is capped at £1,875 for the hours the employee does not work. Again NIC’s pension contributions and 20% of wages must be paid by the employee to total the cap of £2,500.

The CJRS is also available to employees on zero hours contracts and temporary workers. Those on zero-hour contracts will find their money is calculated by working out the average monthly earnings and temporary workers are only able to apply for the length of their contract.

How To Claim

To claim on this scheme, you must first designate affected employees as furloughed workers, and notify your employees of this change.

The online portal is available via via gov.uk, which is where you will be able to submit information to HMRC about the employees that have been furloughed and their earnings. It is only possible to submit one claim as least every 3 weeks which is the minimum length an employee can be furloughed for. This must be completed by 10th June.

After Claiming

Employers should operate their normal payroll, including pay for furloughed employees. Employers are entitled to ‘top-up’ the payment, so employees receive 100% of their pay. Any employees who are seen to be undertaking other employment during their contracted hours with the original employer lose the eligibility for this scheme.

For more information on the changes to the scheme please click here.

There are key changes to the job retention scheme that employers need to be aware of. ”

Lesley Garrett

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