The Chancellor did say he would have further details on the future of the Job Retention Scheme (JRS) by the end of May and as we almost approach that deadline, he has now confirmed what the next steps will be.
It is status quo until the end of June, but from 1 July flexibility will be introduced which it is hoped will allow businesses to start to re-open with gradual employment costs.
From 1 July employers will be able to allow workers to work part-time and the remaining time be furloughed. Under existing rules the furlough legislation means someone must be furloughed for a minimum of 3 weeks; it is assumed at this point this will not be a requirement from 1 July due to the flexibility however, the Chancellor didn’t say this in his speech but I hope will be forthcoming and would make sense if allowing this kind of flexibility.
Where the employer brings an employee back into the workplace, the hours worked must be paid at 100% of their normal pay as the Chancellor stated though this could be very much a mix and match scenario and the furlough pay as now i.e. 80% or if the employer chooses to top up then fine. The Government it seems will still pay the employer National Insurance and Pension contributions on the furlough pay; although further detail will be to come.
In theory the above would allow for example, a worker to work one week, be furloughed for 2 weeks and then work for one week, or they could work 50% of their hours each week and so on.
From 1 August there will be a further change; flexibility will still be encouraged as in July, but the Government will start to reduce its financial support; they will ask employers to pay the National Insurance on all the pay made to the employee. The JRS financial support to employers will also reduce further from 1 September to 70% therefore employers will contribute the 10% if paying 80% of salary and from 1 October (the final month of the scheme) the Government will contribute 60% of wages so the employer will pay 20% if paying 80%.
The new scheme will only be available for those people already furloughed and the cut-off date for people being able to be furloughed and employers claim the new JRS will be they must have been on the payroll on or before 10th June 2020.
For further information from the .GOV website, please click here.