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Furloughed Leave Update - Key Dates, Part-time working and Employers’ Contributions

01 Jun 2020

On Friday Chancellor Rishi Sunak announced reforms to the Coronavirus Job Retention Scheme (CJRS). Although we are still awaiting the detail behind the reforms the headline points are:

  • The furlough scheme will close on 31 October 2020, however 10 June 2020 is the last day that employees can be placed on furlough. Employers will therefore need to consider whether any more employees should be placed on furlough leave prior to 10 June and particular consideration will need to be given to employees who are currently on furlough ‘rotas’ which have been used by some employers.
  • Employees will be able to work part-time whilst on furlough from 1 July. Further guidance is awaited on this major change to the scheme, however we have been told that this is ‘for any amount of time and any shift pattern’, with employers paying for any hours worked (including tax and National Insurance contributions on those payments) and then claiming the CJRS grant for the normal hours not worked. Consideration will of course need to be given to consultation with furloughed employees in relation to part-time working and new furloughed agreements will need to be put in place, not least because previous agreements would have stated no work could be undertaken. We can of course assist with these new agreements and any advice relating to consultation.
Coronavirus
  • Finally, employers will need to contribute as follows:
    • from 1 August, national insurance contributions and pension contributions.
    • from 1 September, the government will only reimburse 70% of salary (up to a maximum of £2,190) and employers will be required to top-up to 80% (or more, depending on what the employer and employee have agreed) and pay national insurance contributions and pension contributions.
    • from 1 October, the government will only reimburse 60% of salary (up to a maximum of £1,875) and employers will be required to top-up to 80% (or more, depending on what the employer and employee have agreed) and pay national insurance contributions and pension contributions.

For more information on any of the above, or how we can help you or your business, please contact Sarah Hall or Sarah Furness, or call 0191 232 8345.