On 29th May 2020, the UK Government announced reforms to the Coronavirus Job Retention Scheme (CJRS). As the new scheme will begin from 1 August 2020, but with significant changes from 1 July 2020, leading Yorkshire law firm Keebles LLP has shared guidance for employers as to how to prepare for this.
Ahead of the upcoming projected changes to the CJRS, there are a number of precautionary steps that employers should take. Catherine Wilson, Partner and Head of Employment at Keebles, says:
“For employers, the top priority must be to review the original furlough letters – many included a review date of 31 May 2020. Employers need to check as a minimum that these reviews have taken place and communicated to furloughed staff.
“New or revised furlough letters may be required to deal with pending changes to the CJRS such as the introduction of flexible furlough from 1 July and the circumstances where an employee may be required to return to work, and such variations will require employee’s consent.
“Employers will only be able to claim a grant under the CJRS going forward if they had already made a claim under the pre 1 July scheme. This will be the new maximum limit on the number of staff who can be included on a claim.
“As there is a minimum 3-week furlough requirement under the current CJRS, the current rules mean that the last day that employers can place employees on furlough is 10 June 2020. Employers who have yet to submit claims under the CJRS should do so as a matter of urgency.”
The distinction between working and say personal training and development has proved controversial in some workplaces. These concerns should abate as the concept of “flexible furlough” is being introduced from 1 July 2020. This means that staff who were previously furloughed will be able to return to work on a flexible part time basis.
Employees will be able to work part time and be furloughed part time. Employers will decide the time split and will be required to pay for the costs of the time staff are working. A grant from the CJRS will be available for the cost of their furloughed hours.
Catherine adds: “The purpose of these changes is to shift the burden from the taxpayer onto employers as lockdown measures end. Employers should be aware of the following changes which are introduced gradually over several months.
“This begins on the 1st August 2020, when employers will have to pay employee’s national insurance contributions and pension contributions which will be irrecoverable under the CJRS.
“Then, on 1st September 2020, the Government will only reimburse 70 per cent of salary (up to a maximum of £2190). Employers are required to top up to 80 per cent (up to a maximum of £2500) or such other amount as has been agreed between the employer and employee.
“Finally, on 1st October 2020, the Government will only reimburse 60 per cent of salary (up to maximum of £1875). Employers will continue having to top up to 80 per cent (up to a maximum of £2500) or more as agreed. The scheme will end on 31st October 2020 – no extensions are anticipated.
“There are several actions employers should take as well in order to ensure all bases are covered. Employers must review accrued holiday entitlement and decide whether employees are to be instructed to take holiday during furlough in whole or in part.
“They must also review affordability of ‘top ups’ to furlough and, if necessary, seek to implement revised terms, and they should also consider impact of furlough on redundancy proposals and whether notice is to be worked on furlough or paid in lieu.”
If you have any further questions on any of the issues raised above, contact the Keebles’ employment team at firstname.lastname@example.org for any further advice. This general guidance is correct as of 1 June 2020 but may be subject to change. Specific advice should be sought as needed.