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Confirmed changes to the coronavirus job retention scheme

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Posted by Tina Chander on 03 June 2020

Tina Chander - Head of Employment Law
Tina Chander Partner - Head of Employment Law

As promised, Chancellor, Rishi Sunak, has now provided details as to how the revised Coronavirus Job Retention Scheme will be implemented. These were announced on Friday, 29 May 2020.

Before considering the upcoming changes to the scheme, it is vital to note that in order to facilitate such amendments, the Government has confirmed that the scheme will close to new entrants from Tuesday, 30 June 2020. Therefore, employers wishing to place workers on furlough for the first time must action this by Wednesday, 10 June 2020 at the absolute latest to ensure they comply with the 3 consecutive week minimum period of furlough.

It was initially though that the scheme would remain in its current form until the end of July 2020. However, we now have confirmation that from 1 July 2020 (until the scheme ends on 31 October 2020) businesses will be afforded the flexibility to allow furloughed workers back to work part-time. This is an attempt to support the Government’s plans for a phased return back into the workplace. It will be up to individual employers to work out the specific days and hours its workforce will work upon their return to the workplace.

From 1 August 2020, the level of financial support from the Government under the scheme will be gradually tapered out, reflecting the fact that businesses will hopefully be starting to gain some sort of financial stability with the workforce having been able to work part-time throughout July. Initially, from 1 August 2020, employers will be asked to contribute Employer National Insurance Contributions and employers pension contributions as opposed to being able to claim for these under the Scheme. The level of grant employers can receive (i.e. 80% of wages, up to a maximum of £2,500) will remain the same throughout August.

Only from 1 September 2020 will the actual value of the grant employers can claim for furloughed workers start to be diminished. From 1 September 2020, the Government will reduce the grant so as to pay 70% of wages, up to a maximum of £2,187.50 per month, and from 1 October 2020 steps will be taken to further minimise the available grant to 60% of wages, up to a maximum of £1,875.00.

Employers must make up to difference in wages, ensuring workers receive at least 80% of wages, up to the monthly maximum of £2,500 throughout their entire period of furlough leave. Of course, employers will still have the prerogative to “top-up” the amount available from the Government if they so wish, and importantly must do so unless a reduction in remuneration has been agreed with the furloughed worker.

It is important for employers to bear in mind that if they wish to extend a period of furlough beyond the date originally anticipated (and agreed), or if they are intending to bring a worker back to work, but only on a part-time basis, normal employment law rules will still apply. Therefore, any changes to terms and conditions of employment, however temporary, will require consent.

If you would like any further advice as to the current or future scope of the scheme, please do not hesitate to get in touch with our employment law team who will be happy to help.

About the author

Tina Chander

Partner - Head of Employment Law

Tina is head of our employment law team. She deals with contentious and non-contentious employment law issues.

Tina Chander

Tina is head of our employment law team. She deals with contentious and non-contentious employment law issues.

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