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On Friday 29th May 2020 the chancellor confirmed the Coronavirus Job Retention Scheme (CJRS) will be extended to October 2020. He also outlined how funding under the scheme will be tapered from August onwards. Below we have summarised the important points mentioned.
From August 2020, the government grant provided through the job retention scheme will be slowly tapered.
An important point to note is the tapering reduces the amount the employer can reclaim via grant funding, the employee is still entitled to and should continue to be paid 80% of their wages, the amount not covered once the tapering takes effect will need to be covered by the employer.
From 1 July 2020, businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay up to 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.
For periods where the employee is working the employer will be responsible for paying wages in full while working. This means that employees can work as much or as little as the business needs, with no minimum time that they can furlough staff for.
Although to be confirmed it is not our expectation part time working will be an option for limited company directors, the rules and calculation for this is based on contractual working hours, directors don’t normally work under an employment contract and therefore it is likely they will be excluded from flexible furloughing. Further guidance regarding flexible furloughing is expected in due course.
The CJRS scheme will close to new entrants from 30 June 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June 2020.
This means that the final date by which an employer can furlough an employee for the first time will be 10 June 2020 for the current three-week furlough period to be completed by 30 June. This means an employee who is not furloughed already cannot commence furlough from 11 June onwards, anyone who has been on furlough on or before 10 June can remain on furlough until the scheme closes at the end of October 2020.
Employers will have until 31 July 2020 to make any claims in respect of the period to 30 June 2020.