Guidance on the changes to the Coronavirus Job Retention Scheme

Following the announcement of changes to the Coronavirus Job Retention Scheme (CJRS) in early June 2020, HMRC published further guidance on Friday 12 June.  This sets out some of the biggest changes to the CJRS since it’s inception including the introduction of flexible furlough.

Here’s some of the headline points:


What changes to the CJRS are happening from 1 July 2020?

From 1 July 2020 employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS grant for the hours not worked.


What do employers need to contribute from 1 July 2020?

For July, the government will continue to pay 80% of wages up to a cap of £2,500, as well as employer National Insurance Contributions (ER NICS) and pension contributions, for the hours the employee is on furlough. Employers will only need to pay employees for the hours that they work.


What will employers need to contribute from 1 August and onwards?

  • From 1 August, the level of the grant will be slowly reduced. No grant will be available for Class 1 employer NICs or pension contributions; these contributions will remain payable by the employer.
  • From 1 September, the Government will only reimburse 70% of salary (up to a maximum of £2,190). Employers will be required to top up to 80% (up to a maximum of £2,500) or such other amount as has been agreed between the employer and employee.
  • From 1 October, the Government will only reimburse 60% of salary (up to maximum of £1,875).  Employers will continue having to top up to 80% (up to a maximum of £2,500) or more as agreed.

The scheme will close on 31 October 2020 and it is not anticipated that there will be any further extensions.


What employees can I now claim for?

From 1 July, only employees you have successfully claimed a previous grant for will be eligible for more grants under the scheme. This means they must have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June.


Are there any exceptions to the 10 June cut-off date?

Parents who are on statutory maternity or paternity leave who return to work in the coming months will be eligible for the furlough scheme even after the 10 June cut-off date.  However, this will only work where they work for an employer who has previously furloughed other employees.  This also applies to people on adoption leave, shared parental leave, and parental bereavement leave.


Do employees still have to be furloughed for a minimum of three weeks?

No – from 1 July 2020 employees will no longer need to be furloughed for a minimum of three weeks.

Although any claim through the CJRS portal must be in respect of a minimum one-week period.  Claim periods starting on or after 1 July must start and end within the same calendar month, and must last at least 7 days unless you’re claiming for the first few days or the last few days in a month.

You can only claim for a period of fewer than 7 days if the period you’re claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.


Do I need to issue employees with a new furlough agreement?

As before, employers must agree any new flexible furloughing arrangement with any employee being placed on furlough and confirm that agreement in writing.  If the employee is already on furlough leave, there will be no need for a new furlough agreement in order to transition into flexible furlough – you will just need to agree (if necessary) the hours or days which the employee is to work during the furlough period.


What if the pay period you are claiming for includes days in more than one month?

From 1 July, the scheme rules will change each month.  This means that claim periods starting on or after 1 July must start and end within the same calendar month.  If your pay period includes days in more than one month, you’ll need to submit separate claims covering the days that fall into each month.  You should calculate each of those claims separately.  Claim periods cannot overlap, so you will need to make sure that you include all of the employees you want to claim for in each claim you make.


How do I work out an employee’s usual hours and furloughed hours?

If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work, as well as their furloughed hours for each claim period.  There are two different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours.  Further details of this can be found here.


What if I miscalculate and submit an incorrect claim?

The revised Scheme re-iterates that is an employer’s responsibility to check that any amounts claimed are correct and that it is not permissible to claim more than the maximum amount for each employee nor to claim in respect of any wages not paid out the employee.  However, it acknowledges that genuine mistakes will happen and now provides for errors to be rectified.  Where they arise, employers should inform HMRC of any over/under claimed amount (preferably as part of their next claim).

Any overpaid sums will need to be repaid – normally through an adjustment to a subsequent claim.  Potentially, this new rectification facility may permit employers to recover elements of furlough pay under claimed in previous claim periods, due to a misunderstanding, such as discretionary overtime.


Watch this space…

The Government plans to give businesses a 30-day window of opportunity to confess to furlough fraud.  In the draft legislation HMRC have warned employers that it will be able to charge a penalty for any deliberate non-compliance as part of an initiative to target those submitting incorrect or fraudulent claims.  The legislation is expected early next month.

It is therefore clear of the importance of making sure your record keeping is up to date and that all claims to date are correct.  HMRC guidance states that you must keep a copy of all records for 6 years, including;

  • the amount claimed and claim period for each employee,
  • the claim reference number,
  • your calculations in case HMRC need more information about the claim,
  • usual hours worked and actual hours worked for employees who are flexibly furloughed.



18 June 2020

Catherine Wilson

Catherine specilaises in all aspects of employment law, with a particular emphasis on discrimination, whistleblowing, redundancies and senior executive severances. Catherine is head of employment at Keebles LLP.

Leave a Reply

Your email address will not be published. Required fields are marked *

Name *

Email * Website

Comment *