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Coronavirus (COVID-19) – All things furlough (again!)

What do we already know?

As explained in our April Newsletter All Things Furlough – FAQS and what we know so far the Coronavirus Job Retention Scheme (‘CJRS’) is a temporary scheme funded by the Government to create an alternative to implementing redundancies, lay-offs, unpaid leave or other measures employers might otherwise need to instigate during the current crisis.

CJRS changes from 1 July 2020

From 1 July, the Coronavirus Job Retention Scheme (CJRS) changed in three main respects:

On 12 June, the Government published revised guidance (available here) covering these changes.

What is flexible furlough?

From 1 July businesses will be given the flexibility to bring furloughed employees back to work part-time and still claim under the CJRS.  This is known as ‘flexible furlough‘. Employers can continue to fully furlough employees if they wish.

The key features of the flexible furlough scheme are as follows:

Also, it is worth noting that the Government has updated its guidance on the CJRS to clarify that:

What are the changes in making claims for wages to HMRC?

These main changes include:

Given the scope for confusion over timing of claim periods, the Guidance provides a number of worked examples, available here;

What are the changes to CJRS Government funding?

Until 31 July 2020, the Government will continue to cover furlough costs on the current basis (80% up to £2,500, plus employer NICs and pension contributions).

However, from 1 August 2020, employers will be expected to meet some of the furlough costs as set out below:

Date % recoverable wages Additional employer liabilities
1 July 80% unworked days (up to £2,500)
1 August 80% unworked days (up to £2,500) Employer National Insurance (NI) and pension contributions
1 September 70% unworked days (up to £2,187.50) Employer NI and pension contributions & 10% wage contribution (to make up the 80% total up to a cap of £2,500 i.e. up to £312.50)
1 October 60% unworked days (up to £1,875) Employer NI and pension contributions & 20% wage contribution (to make up the 80% total up to a cap of £2,500 i.e. up to £625)


No further Government subsidy will be payable after the end of October.

There are no changes to the pay taken into account for the revised CJRS and is determined by reference to an employee’s regular pay. However, working out an employee’s level of pay as between usual hours and furloughed hours is potentially more complicated for those on flexible furlough.

Employers will be required to pay employees for any hours that are actually worked under flexible furlough arrangements in accordance with contractual arrangements. The starting point therefore is that employees are entitled to their full pay for any time when they are working, even if they had been receiving only 80% whilst on furlough to date.

There is no reason in principle why employers could not seek to agree varied pay arrangements with their employees, although National Minimum Wage requirements will apply in respect of time not spent on furlough and it is unlikely to be feasible to agree arrangements that are not as least as generous as those that apply under the CJRS.

What should employers do next?

The changes to the scheme are undeniably complex – in particular the calculations for flexible furlough.  Therefore, the first decision for employers to make is whether the benefits of flexing staff hours in this manner will make up for the administrative burden of doing so!  One possible alternative, now that there is no longer a minimum furlough period, is for employers to put in place a more frequent rotation of staff, for example, one week on furlough and one week off, which means employees are on €œstandard€ furlough arrangements for those weeks not working. This would avoid the need to use the official flexible furlough scheme and the calculations that go with it.

Another pressing issue for employers is the increasing costs of the CJRS from 1 August 2020 and whether they will wish to continue using the scheme.  The increased cost of furlough, combined with the increasing complexity of the calculations and process for claims, may mean employers need to pursue alternative options, such as changes to terms and conditions, or redundancy, sooner than later.

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