Changes to the Coronavirus Job Retention Scheme

Since our last update there have been further changes announced to the Coronavirus Job Retention Scheme (furlough scheme). The changes reflect people returning to work over the coming months and, from August 2020, employers start to share the burden of paying furloughed employees on a staggered basis.

The following gives an overview of the key changes:

The Coronavirus Job Retention Scheme (furlough scheme) was closed to new entrants on 10 June, this however does not apply to those returning from family-related leave;
From 1 July, employers will be able to bring back furloughed employees part-time without taking them out of the scheme;
The requirement that each period of furlough be at least three weeks will no longer apply;
Any employer utilising flexible furlough will have to keep a new written agreement;
The cap on the Government’s contribution will be reduced pro-rata by the proportion of the employee’s normal hours worked;
For employees furloughed during August and beyond, the Government will no longer reimburse employer’s NIC and pension contributions;
In September the Government contribution cap will reduce from 80% and £2,500 to 70% and £2,187.50;
In October the Government contribution cap will reduce to 60% and £1,875;
For employees furloughed in September and October, employers will have to makeup the shortfall of 10% and 20% respectively – furlough pay cannot be reduced in line with the lower Government contributions;
The furlough scheme will close on 30 October.

Regarding the requirement for employees to take holiday whilst on furlough, this remains perfectly legal but it is worth pointing out that the Government’s holiday guidance now states:

“If an employer requires a worker to take holiday while on furlough, the employer should consider whether any restrictions the worker is under, such as the need to socially distance or self-isolate, would prevent the worker from resting, relaxing and enjoying leisure time, which is the fundamental purpose of holiday”.

Please contact Daniel Isaac for further information.

The contents of this email are intended for general information only and do not constitute legal advice. Wallace LLP cannot accept responsibility for any loss arising from the use of the content in this email. This information was prepared on 23 June 2020.