Up until 1st July 2020, employees furloughed under the Coronavirus Job Retention Scheme were not permitted to carry out any work. However, those rules have now changed and the scheme now allows employers more flexibility in bringing their employees back to work.
We’ve set out below the key changes on a month by month basis, including what happens after 31st October and the Job Retention Bonus Scheme.
From 1st July any furlough arrangement will be treated as a ‘flexible furloughing’ arrangement. This is to enable employees to return to work on a part-work, part-furlough basis. When working, employees will be paid their normal wage, whilst they will receive the furlough grant for the remainder of their usual working hours.
The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything. Any holiday taken during a flexible furlough period is to be treated as furlough, even if it is on days the employee was otherwise due to work.
From 1 August, the government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions
From 1st September, the government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
From 1st October, the government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.
The Coronavirus Job Retention Scheme will close on 31st October 2020.
THE JOB RETENTION BONUS SCHEME
In his one-off summer budget statement, the Chancellor, Rishi Sunak, announced a new job retention bonus as part of his Plan for Jobs 2020.
The scheme will reward employers who bring workers back from furlough and retain them in employment until the end of January 2021 with a £1,000 bonus for each employee. This bonus will be paid from February 2021.
Detailed guidance on the scheme, including how to claim, will be published in September.
To qualify for the bonus, the employee would need to remain continuously employed through to the end of January 2021 and earn an average of £520 per month over that period (this is the lower earnings limit for qualifying for certain benefits). The employee must have earned something during each of these months, and only earnings recorded through HMRC Real Time Information (RTI) records can be counted.
Only time will tell if this bonus of £1,000 per employee will be sufficient incentive to prevent employers from considering redundancies. Potentially, it will have the biggest impact in the retail, leisure and hospitality sectors who have been hit hardest. However, if an employer has already decided that redundancies are inevitable, it is unlikely to make them reconsider.
The HR Genie offers expert advice and HR support to SME businesses. If you would like a non-obligation consultation about HR in your business and the various Government initiatives in response to the Coronavirus crisis, do get in touch.