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British flag with Covid-19 job retention scheme

Covid-19 Job Retention Scheme – Flexible Furlough explained

2nd June 2020 by Robin Watson

Categories: Covid-19
Tags: , , , , ,

Since 1 March, the Covid-19 Job Retention Scheme (CJRS) was set up to support people, protect jobs and businesses through the pandemic, and has proven to be a lifeline to employees and employers, helping to prevent mass unemployment. On 29 May, Rishi Sunak announced changes to the scheme over the next few months.

Please find below the main points you need to be aware of, on a monthly basis;

JUNE

  • The scheme continues as from 1 March, The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance and pension contributions. Employers are not required to pay anything.

JULY

  • From 1st July, businesses will be given the flexibility to bring furloughed employees back part time. Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.
  • For the hours the employee is furloughed, the government will pay 80% of wages up to a cap of £2,500 – as per June.

PLEASE NOTE:

To enable the introduction of part time furloughing, and support those already furloughed back to work, claims from July onwards will be restricted to employers currently using the scheme and previously furloughed employees. The scheme will close to new entrants on 30 June, with the last three-week furloughs before that point commencing on 10 June.

AUGUST

  • The government will continue to pay 80% of wages up to a cap of £2,500, however employers will be responsible for paying National Insurance and pension contributions. (For the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.)

PLEASE NOTE:

Around 40% of employers have not made a claim for employer NICs costs or employer pension contributions and so will be unaffected by the change in August if their employee’s employment patterns do not change.

Many smaller employers have some or all of their employer NIC bills covered by the Employment Allowance so will not be significantly impacted.

Around 25% of CJRS monthly claims are below the thresholds where employer NICs and automatic enrolment pension contributions are due, and so no employer contribution would be expected for these payments to furloughed employees in August.

When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of a week, for grants to be calculated accurately across working patterns.

SEPTEMBER

  • The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay National Insurance and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. (For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.)

OCTOBER

  • The government will pay 60% of wages up to a cap of £1,875. Employers will pay National Insurance and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. (For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.)

If your business needs any support with the furlough process then please contact our team today and we will be happy to help.

Robin Watson

Partner — Employment and Immigration

Direct dial: 01202 755202

Email

“Cocowai is a wholesale and online retail cashmere company. We recently contacted Robin Watson at Laceys Solicitors to help and advise us with producing an employment contract, and subsequently for advice on other employment issues. Robin has been extremely helpful and efficient throughout the whole - from our initial meeting, through to further telephone conversations and subsequent emails. I have been impressed by Robin's consideration of our "type" and "size" of company, whilst advising on what kind of contract we needed for our business. ”

Frances Macaulay, COCOWAI

Robin studied law at the University of Southampton before achieving Distinction in a postgraduate law diploma at Bournemouth University in 2011 and being awarded the Dorset Magistrates’ Association Excellence in Advocacy Award.

Robin qualified as a solicitor with Laceys in 2011, and is now one of Laceys partners, specialising in employment law and advising on Human Resources. Robin also has an interest in Immigration for employers and individuals as well as Court of Protection advice.

With Employment matters, he advises employers, HR Directors and managers on all aspects of complex employment law and day-to-day HR issues.

Robin regularly advises on TUPE when clients are buying or selling a business or in relation to tenders. Robin also represents clients during Employment Tribunal proceedings. Robin’s clients range from small local start-ups to large national businesses.

Robin has a Higher Rights of Audience, which after a period of training and assessment, entitles him to appear in all courts in England and Wales in civil law cases. Without this qualification, solicitors can only appear in the County Court.

Away from work Robin enjoys cycling, cooking and eating. Lately, Robin has (again) started sketching and is trying to convince himself that he has a talent!

To find out more about Robin becoming Partner and why he chose to specialise in Employment and Immigration law click here;

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