The CJRS scheme will close to anyone who hasn’t been furloughed for 3 weeks by 30th June. This means you will only be able to claim for employees after that if they have been furloughed for a 3 week period at any time before 30th June. Working back, this means that the last day an employee who has not been furloughed before can be furloughed is 10th June. Moving forwards, you will have until 31st July to make a claim for any periods of furlough up until 30th June.
New CJRS Rules From 1st July
From 1 July 2020, employers will have the flexibility to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August.
Employers can decide the hours and shift patterns that employees will work on their return and are responsible for paying their wages in full while working. This means that employees can work as much or as little the business needs, with no minimum time that staff can be furloughed for.
When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of a week. Employers can choose to make claims for longer periods, if preferred, including monthly or two weekly cycles. Employers will also be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If employees are unable to return to work, or there is no work for them to do, they can remain on furlough and employers can continue to claim the grant for their full hours under the existing rules.
Employer contributions start from August
From August 1st 2020, the Government grant provided through the CJRS will be slowly tapered and phased out:
• June and July. The Government will pay 80% of wages up to a maximum of £2,500, as well as employer National Insurance and pension contributions, for the hours the employee doesn’t work. Employers will have to pay employees for the hours they work
• August. The Government will continue to pay 80% of wages up to a cap of £2,500, however, employers will pay ER NICs and pension contributions. By way of example, for the average claim, this represents 5% of the gross employment costs that employers would have incurred if the employee had not been furloughed
• September. The Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
• October. The Government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
The CJRS ends on 31st October.
Firstly, if you are a smaller employer, some or all of your employer NIC bills will be covered by the Employment Allowance. This means you probably won’t be significantly affected by that part of the tapering of the Government contribution.
Secondly, about a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due. This means that no employer contribution will be required for these furloughed employees in August.
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If you need any help or advice regarding your payroll, CJRS or otherwise, just get in touch, we’ll be happy to help.