04/06/2020
Changes to the Job Retention Scheme
As you may have seen in the news, the Job Retention Scheme will now run for eight months until the end of October, with claims backdated to 1 March 2020.
On 29 May, further major changes to the scheme were announced. In effect there will be two schemes - the 'mark I' scheme which will run until 30 June 2020 and the 'mark II' scheme of 'flexible furlough' which will introduce more flexibility to help employees back into work and under which employers will be asked to contribute towards the cost of their furloughed employee's salaries and replace part of the contribution currently made by the Government. Furloughed employees will remain entitled to 80% of their wages (subject to the monthly cap of £2,500) throughout their furloughed time.
If you wish to take advantage of the new, flexible scheme in the coming months, you must ensure any employees qualify by furloughing them for at least 3 weeks by the 30th of June, so anyone who has not been furloughed yet will need to be by next Wednesday, the 10th, to make sure they qualify for the mark 2 scheme.
Key dates for changes are as below. We are expecting detailed guidance on the changes to be published on 12 June 2020.
10 June 2020 - This will be the last day on which an employee can be furloughed for the first time in order that they can complete the minimum three week period before the scheme closes to new entrants.
30 June 2020 - The original 'mark I' scheme will close to new entrants.
1 July 2020 - The 'mark II' version of the scheme takes effect. From this date, the scheme will only be available to cover the wages of employees who were furloughed at some point under the 'mark I' scheme. At the same time, employers will be able to bring back furloughed employees on a part time basis, with the furlough scheme contributing to 80% of their salary (subject to the relevant cap) for their normal hours not worked.
31 July 2020 - Employers claiming under the 'mark I' scheme must have completed and submitted all claims for the period to 30 June 2020.
1 August 2020 - From this date the scheme will no longer cover the costs of employers NIC and pension contributions on furloughed wages and employers must cover this cost.
1 September 2020 - The Government contribution will be reduced to 70% of wages, up to a cap of £2,187.50 per month for the hours the employee does not work. Employers must make up the difference of 10% to bring furlough payments to 80% of wages (up to a cap of £2,500) for unworked hours, while continuing to meet NIC and pension contributions on furloughed wages.
1 October 2020 - The Government contribution will be reduced to 60% of wages, up to a cap of £1,875 per month for the hours the employee does not work. Employers must make up the difference of 20% to bring furlough payments to 80% of wages (up to a cap of £2,500) for unworked hours, while continuing to meet NIC and pension contributions for furloughed wages.
Please contact us if you have any queries.