Employer Update | Furlough Leave & Pay

Flexibility

The Government has now confirmed that from 1 July, employers will be able to bring furloughed employees back to work.

The Government’s updated furlough guidance confirms that where employers and employees agree, employees can work for any amount of time and any shift pattern, with employers being able to claim the relevant Coronavirus Job Retention Scheme (“CJRS”) grant for the normal working hours that have not been worked.

The introduction of flexibility to the CJRS has been welcomed by employers. It’s not all good news however as the Government has also now confirmed that with effect from 1 August 2020, the level of CJRS grant will start to be reduced.

June & July

The Government has confirmed that it will continue to pay 80% of wages up to the existing cap of £2,500 in June and July for the hours the employee is on furlough, as well as employer National Insurance Contributions (“NICs”) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.

August

However, for August, whilst the government will continue to pay 80% of wages up to a cap of £2,500 for the hours an employee is on furlough, the responsibility for paying employer NICs and pension contributions for the hours the employee is on furlough will switch to the employer.

September

For September, the government will pay a reduced CJRS grant of 70% of wages up to a reduced cap of £2,187.50 for the hours the employee is on furlough. Employers who are still participating in the CJRS at this time will, in addition to paying employer NICs and pension contributions, also need to top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for the time they are furloughed.

October

Finally, in October, the Government’s CJRS grant will reduce to 60% of wages up to a reduced maximum cap of £1,875 for the hours the employee is on furlough. Employers will continue to pay employer NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

The Coronavirus Job Retention Scheme will close on 31 October 2020.

Please contact us if you’d like more information about the issues raised in this article and/or or to find out more about the various Employment Law and HR related policies, procedures, guidance and training that we provide.

Harrington Law is a specialist and niche firm of employment law and data protection solicitors. The firm acts for and advises businesses and organisations in York, Leeds, Bradford and throughout the UK.

Disclaimer: the information set out above does not constitute legal advice and it is provided for general information purposes only. No warranty, whether express or implied is given and neither the author or Harrington Law shall be liable for any technical, editorial, typographical or other errors or omissions within the information provided.