In accordance with the Government guidance issued in July, the Coronavirus Job Retention Scheme (CJRS) will come to an end on 31 October 2020. The guidance, as outlined in our previous updates, remains unchanged and employers must contribute to employees’ wages for the period they are on furlough leave as follows:
1-30 September 2020:
In accordance with the policy issued on 1 July 2020 and with effect from 1 September 2020, HMRC will pay 70% of wages (up to a cap of £2,187.50 per month) for the hours/days on which an employee is on furlough leave. Employers must ensure they pay ER NICs, pension contributions and top up employees’ wages to ensure they receive 80% of their wages (up to a cap of £2,500.00 per month) for the period they are furloughed.
1-31 October 2020:
With effect from 1 October 2020, HMRC will pay 60% of wages (up to a cap of £1,875.00 per month) for the hours/days on which an employee is on furlough leave. Employers must ensure the pay ER NICs, pension contributions and top up employees’ wages to ensure they receive 80% of their wages (up to a cap of £2,500) for the period they are furloughed.
Employers can choose to continue topping up employees’ wages above 80% (and the £2,500.00 per month cap) for the hours not worked, if they so wish.
Employers must continue to top up any holiday or notice pay to 100% of wages for the time employees are on furlough leave, increasing the top up to 30% for September and 40% for October.
Flexible Furlough Agreements:
As the Government reduces restrictions for businesses, employers might find themselves wanting to bring employees back to work on a flexible/part-time basis. As outlined in previous updates, employers may do so by entering into a flexible furlough agreement with those employees:
- Agreements must have been made before the beginning of the claim period they relate to and cannotbe made retrospectively.
- Agreements should be varied if significantly changed, for example, if an employee’s working hours increase or decrease.
- Agreements must specify the main terms and conditions upon which the employee will work for the employer.
Contact our Employment Law team
If an employer chooses to continue furloughing an employee in full, they do not necessarily need to issue a new written agreement if the employee’s current furlough agreement has not changed, namely they will remain on furlough leave until work becomes available to them or the CJRS comes to an end on 31 October 2020.
For more information on employment law issues and the impact of Covid-19 contact Victoria Regan or Amy White in Rix & Kay’s Employment Team.