The first part of the Coronavirus Job Retention Scheme covered furloughed periods for employees from 1st March 2020 through to 30th June 2020, and it is coming to an end. Employers who are wanting to receive a grant are required to complete their online application by 31st July 2020. Employers will need to finalise the calculation of payments and claims. For each following calendar month, a series of changes will occur with the introduction of CJRS part two which offers flexible furlough. The CJRS will close on 31st October 2020.
Employers can negotiate a new flexible furlough arrangement with employees who already had a period of 21 days continuous furlough. Additionally, the scheme is available to parents returning from extended maternity, adoption and shared parental leave. The change will require new legal agreements and planning to coordinate the needs of getting Britain back to work, whilst keeping Britain paid.
The key difference is that there is no minimum period of furlough. The basis of furlough and grant proportion is to be based on the difference between actual hours worked and the employees’ usual hours in the calendar month. The relevant hours now form part of the online claim process.
Employers can choose to top up furloughed hours wages above 80% at their own expense. Employers must pay for hours worked.
HMRC has updated guidance late into the evening of Friday 12th June 2020. Employers now need to plan and prepare if they are furloughing employees into July 2020.
The HMRC library of guides can be reached at:
This identifies changes applied on 12th June 2020 to the following:
Guidance was updated on 12th June on how the scheme will change from 1 July. The first time the employer can make claims for days in July is the 1st July. 31st July is the last day to submit claims for periods ending 30th June.
For employees who are flexibly furloughing, employers need to have agreed the furlough arrangement with the employee (or reached a collective agreement with a trade union) and keep a written agreement that confirms the furlough arrangement. For the claim new data is additionally needed:
Employers and payroll professionals utilising flexible furlough will need to undertake assessment and calculations to deduce usual hours. Measures need to be put into place to accurately record work time.
Early indications imply that employees with any element of unmeasured work cannot utilise flexible furlough and they will not qualify for grant.
The furlough scheme has been welcomed by UK PLC and has helped save millions of jobs. Moving into flexible furlough offers employers the opportunity to plan a staggered return to work. However, there are some complexities on the journey of defining pay and claiming the online grant and meeting what may be viewed as complex calculations to derive the required proportions.
I wish the payroll profession all the best on maintaining its resilience over this period. My advice is to:
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P. Simon Parsons - M.Sc FCIPPdip MBCS and Director of Payments, Benefits & Compliance Strategies