As the chancellor announced the extension to the Coronavirus Job Retention Scheme (CJRS) and that there would be some adjustments, we have eagerly anticipated more detailed guidance on the changes. Thankfully, these have been released well ahead of July to give us time to adapt systems and processes to capture the new changes.
6. In both September and October, the employer is liable for the top up to ensure the employee is paid 80% of their normal pay up to a maximum of £2,500.
In practical terms, this means things are going to get more complicated and more expensive for businesses. But a positive note is that employees are not subject to the current ‘all or nothing’ furlough situation which will be a relief to many.
The table below shows how the CJRS will change over the coming months.
|Furlough pay||80% up to £2,500||80% up to £2,500||70% up to £2,187.50||60% up to £1,875|
|Employer NIC and Employer Pensions from the Government||Employer NI and Employer Pension on furlough pay only||No contribution||No contribution||No contribution|
|Employer contribution to wages||Optional||Optional||10% up to £312.50||20% up to £625|
|Total employee pay||80% up to £2,500||80% up to £2,500 and 100% for hours worked||80% up to £2,500 and 100% for hours worked||80% up to £2,500 and 100% for hours worked|
From a recording perspective, employers “must keep records of how many hours your employees work and the number of hours they are not working or furloughed”. This means employers will need to record:
Note that we refer to months here as the guidance states that employers cannot claim over one calendar month – the minimum claim period is 7 days.
The following are items that should be considered by all employers accessing the CJRS:
The payment to casual/flexible staff has been very complicated to work out for many employers as without a set salary, the payment has been based on the average of the last 12 months up to the end of March or the same pay period in the last year – whichever is higher.
If flexible furlough is used, this means that for employees who work variable hours, their ‘usual hours’ is not based on the hours you predict that they would have worked in the claim period if they had not been furloughed. Nor can you simply agree the usual hours with an employee in their flexible furlough agreement.
Instead, you have to calculate their usual hours by looking backwards at the usual hours they worked last year. You must, therefore, calculate usual hours based on the higher of either:
You can find guidance on the different scenarios covered by the new scheme here.
If you need help with furlough calculations, your payroll system configuration to support furlough and those returning to work, or if you need support with reporting to ensure you have the correct data for furlough calculations, please get in touch.
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