COVID-19: When will employers start paying part of furloughed staff wages?

On 29th May 2020, Chancellor Rishi Sunak announced further changes to the Coronavirus Job Retention Scheme (CJRS).

In the update, more details were shared on “flexible furloughing” arrangements, closing dates for new entrants and the timeline for employers to start contributing to furloughed staff wages. We've summarised the changes below.

Previous update: Coronavirus Job Retention Scheme extended to October 2020

What is flexible furloughing?

From 1st July 2020, employers will have the option to bring back furloughed staff on a part-time basis.

The part time furloughing arrangement is flexible and can be determined by the employer, according to business and staffing needs. There is no set definition of part time hours.

For example, furloughed staff can be brought back for 3 days per week, paid by the employer, with the furlough scheme covering the remaining 2 days.

The changes were originally planned to take effect in August 2020. However, HMRC has brought this forward by one month.

When will employers have to start contributing to furloughed staff salaries?

In June and July, the government will pay 80% of furloughed staff salaries, up to a maximum of £2,500 per month.

From August, employers must start to cover National Insurance and pension contributions. The Scheme's contribution to staff salaries will stay at 80%.

From September, employers will be asked to contribute 10% towards salaries, with the Scheme paying the other 70%.

In October, the Scheme will pay 60%, and employers will contribute 20%. After this point, the Scheme will close for good.

What is the deadline for the Job Retention Scheme?

The Job Retention Scheme will close to new entrants on 30th June 2020. Any claims under the Scheme must be submitted by 31 July 2020.

Employers wanting to place staff on furlough for the first time will need to do so by 10th June, in order that they can complete the minimum furlough period before then.

From 1st July 2020, the Scheme will only be available to employers that have previously used the Scheme, in respect of employees they have previously furloughed. 

Where can I access further advice?

If you would like to discuss further, please contact our Partner Andrew Noton, (andrewnoton@lubbockfine.co.uk) or your usual Lubbock Fine contact.

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