Flexible furlough from 1 July under revised CJRS

From 1 July the scheme will allow part-time working, but staff must have been furloughed by 10 June to be eligible.

The Chancellor has announced the government’s plans to change the CJRS which will now be re-engineered to support businesses sending staff back to work. Employers will be able to put staff on part-time furlough, claiming the CJRS grant for a portion of their salary.

Critically, employers will only be able to claim going forward if they have previously claimed under the pre-1 July scheme.

Note too that as there is a three-week minimum furlough requirement under the current rules, it follows that any new period of furlough leave must have started by 10 June 2020 to be complete when the current scheme ends on 30 June and so ensure the employee remains eligible from 1 July.

The proposed changes also introduce a new limit to the number of staff who can be included on a claim. This will be based on the maximum staff ever included in any single pre 1 July claim. The Chancellor also confirmed that from 1 August the CJRS grant will no longer cover the cost of employers’ National Insurance nor pension contributions with employers expected to cover the costs.

What is changing?

For July the grant will be available on the same basis as now (the lesser of 80% of pay and £2,500). The intention is that the government will reduce its contribution over the remaining months of the scheme – August to October – with a corresponding increase in the employer contribution.

• August - the CJRS will continue to pay 80% of wages

• September - the CJRS will pay 70% of wages while employers will take on the other 10%

• October - the CJRS will pay 60% of wages while employers will take on the other 20%

Throughout the duration of the furlough scheme it is important to remember that the employee will continue to receive their salary entitlement in full, as set out by the terms of their employment contract. The CJRS is a grant paid to the employer, and it is this grant which is now being scaled back, the calculation being based on the salary paid for any period while the employee is being furloughed.

The revised scheme has many of the same features as the current scheme which runs between 1 March and 30 June 2020, but there will be some significant changes intended to encourage those previously furloughed back to work. In summary, these are:

• Employees who were previously furloughed will be able to return to work on a flexible part-time basis.

• For those staff who are furloughed part-time, employers will be required to pay for the cost of the time staff are working. A grant will be available for the cost of their furloughed hours.