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Employers guide to claim for wage costs
09 Apr 2020

UPDATE : The Coronavirus Job Retention Scheme has now been extended until 30 April 2021.  You can no longer submit claims for claim periods ending on or before 31 October 2020, more information about claiming for wage costs through the CJRS can be found here.

 
Coronavirus Job Retention Scheme - Update November 2020
 
Following the announcement of a new national lockdown until December 2, the furlough scheme has now been extended with the JSS due to be introduced once the furlough scheme ends.
 
 
 
June 2020 Update
 
Chancellor Rishi Sunak has announced some major changes to the Government’s Coronavirus Job Retention Scheme – the programme which has seen millions of workers placed on furlough during the Covid-19 pandemic.
The scheme will now come to a close on October 31 with a raft of changes to the way it is implemented coming into effect from July 1.
Here Julia Fitzsimmons, Partner in our Employment team, looks at what the new changes will mean.
 
What are the major changes to the Coronavirus Job Retention Scheme? 
Under the original scheme, once an employee was placed on furlough they could not work for their employer in any capacity. However, from July 1 employers will be allowed to bring furloughed staff back on a part-time basis if required and still be able to claim a grant for the hours not worked. 

For the employer to be eligible to claim from this date, the member of staff must have been placed on furlough for at least 3 consecutive weeks between March 1 and June 30.  

Will the Government still cover all the cost of the scheme?

No. From August 1 employers will be asked to contribute towards the cost of furloughed staff’s wages to make sure they continue to receive at least 80% of their pay whilst on furlough. The level of the grant will be reduced each month until the closure of the scheme at the end of October.

How will the changes to grants be introduced?

In July, the Government will pay 80% of wages up to a cap of £2,500 for the hours the employee is on furlough. The Government will also pay employer National Insurance Contributions (ER NICs) and pension contributions for those hours. Wages for any hours worked will be paid by the employer.

In August the Government will continue to pay 80% of wages up to the cap of £2,500 to cover the furloughed hours but employers will now be responsible for paying ER NICs and pension contributions for the furloughed period. 

In September, the Government payment will drop to 70% with a cap of £2,187.50. Employers will still pay ER 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 the time they are furloughed. 

For October, the Government payment will fall to 60% of wages up to a cap of £1,875. Again, employers will pay ER 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 the time they are furloughed. 

Who can I put on furlough?

You can claim for furloughed employees that were employed on 19 March 2020 and who were on your PAYE payroll on or before 19 March 2020. But from July 1 you can only claim for an employee who was previously awarded a grant under the scheme. They must have previously been furloughed for at least 3 consecutive weeks between March 1 and June 30. Employers will have until 31 July to make any claims for claim periods up to 30 June.
 
How will furlough payments be calculated for employees brought back on a part-time basis?
All payments will be proportional. If a member of staff is required to work for 40% of their usual time, they will receive a furlough payment of up to 60% of the cap to cover the remainder of the time they are not working so long as they qualify for the scheme.

Can employers continue to top up wages if they wish?

Yes, there is no restriction on employers making additional payments above the 80% level at their own expense.