Please note: the legal advice given in this article is correct as of 30/06/20. As the situation develops, guidance is subject to change and, while we will do our best to give you up to date information, it is always advisable to speak with a solicitor for specific advice.
Over the weekend, the Chancellor Rishi Sunak has announced reforms to the Coronavirus Job Retention Scheme.
Further updates to the Treasury Direction and the Employer’s Guidance are expected imminently, but employers need to be proactive and start to think about their future plans as the support is reduced over time.
• 10 June 2020 will be the last day that employers can furlough employees.
• From 1 July, ‘flexible furlough’ is being introduced, meaning employees will be able to work part-time and be furloughed part-time. Businesses will decide how that will work (in terms of the time split). UPDATE: Further guidance on flexible furloughing and how employers should calculate claims has been published here.
• From 1 August, employers will have to pay employee’s national insurance contributions and pension contributions, and can no longer reclaim them through the CJRS.
• From 1 September, the government will only reimburse 70% of salary (up to a maximum of £2,190). Employers are required to top-up to 80% (or more, depending on what the employer agreed with the employee).
• From 1 October, the government will only reimburse 60% of salary (up to a maximum of £1,875), and employers will continue having to top up to 80% (or more).
• The furlough scheme will close on 31 October 2020.
• The self-employed grant is being extended, with applications opening in August for a second and final grant. There will be parity with the reducing furlough scheme, paying 70% (not 80%) of average earnings up to £6,750.
Employers should remember that they need to consult with their employees and seek their consent as furlough leave is a change to their status and terms and conditions of employment. In practice, we are seeing many employers failing to do this, which is likely to result in employee grievances and/or Employment Tribunal claims.
If you are an employer and you require advice and/or assistance about the Coronavirus Job Retention scheme, furlough leave, flexible furlough and/or with notifying and communicating with employees about the above or if you encounter difficulties with employees in this situation, please call 0845 287 0939 or contact us via email for advice