The Coronavirus Job Retention Scheme has been updated yet again, on Friday 29 May 2020.

The purpose of the update is to begin the process of reintegrating employees who have been on furlough leave, back into the workplace and normal working life, whilst also having employers begin to contribute towards the cost of those on furlough leave.

Before summarising the changes, it is worthwhile noting that the changes have perhaps increased existing concerns in many sectors.

Perhaps the biggest concern is for those in sectors that remain unable to operate, due to the government imposed restrictions. The hospitality sector in particular, comes to mind.

The changes to the scheme will result in the employer needing to contribute some money towards the employee’s wages, even if they remain on furlough leave.

This significantly changes the current status quo, which has been that employees on furlough leave, provided they have agreed to accept 80% of pay, have not cost employers anything whilst on the current scheme. This will change from 1 August 2020 onwards.

This change could result in employers having to consider redundancies, if they are unable to make the payments that will become necessary under the scheme.

Many businesses have already started the process of considering redundancies generally. This has arisen from a combination of factors, including the realisation that some businesses can cope with less personnel and a general reduced workload.

If you require any support with redundancies or would like an initial conversation, please do not hesitate to let us know.

The summary of the changes to the scheme are as follows:

• The last day on which employers can place new employees on furlough leave, to be eligible under the scheme, will be 10 June 2020.

• Flexible furlough will become available from 1 July 2020.
  This means employees will be able to return to work part-time and be furloughed for the remainder of the week.
  An example being an employee who normally works five days per week and has previously been furloughed for those five days, doing no work whatsoever for the employer.
  Under the flexible furlough arrangement, that employee could be brought back to work for two days per week and furloughed for the other three.
  This will work on the basis that when the employee is in work, the business will be responsible for 100% of wages.
  On the days the employee is on furlough leave, the old scheme will remain in place and the government will pay 80% of wages for those days, up to the current maximum of £2,500 per month.
  It will be for each business to decide, in conjunction with consultation with employees; how the split will work i.e. what days they will come in to work (if any) and what days they will remain on furlough leave at home.
  We strongly recommend these arrangements are agreed, recorded in writing and then stored safely.

• From 1 August 2020 onwards, employers will have to pay National Insurance contributions and pension contributions, meaning these can no longer be reclaimed through the scheme.
  The scheme will still pay 80% of wages.

• From 1 September 2020 onwards, the government will only reimburse 70% of wages, for those employees on furlough leave.
  This will be subject to a new maximum cap of £2,190 per month.
  Employers will be required to top-up the employee’s salary to a minimum of 80%, or more subject to the agreement they have with employees.
  In short, an employer will be required to pay at least 10% of the employee’s wages along with the National Insurance and pension contributions.

• From 1 October 2020 onwards, the government will only reimburse 60% of wages.
  This will be subject to a cap of £1,875 per month.
  From this date, employers will have to top up wages to a minimum of 80%, or more subject to the agreement they have with employees.
  This will result in employers having to pay at least 20% of employee wages, along with paying National Insurance and pension contributions.

• The scheme will end on 31 October 2020.

Separately, we remind everyone that we are hosting a Return to Work webinar on Thursday 4 June 2020 at 3.00pm via ZOOM.

We will be covering these latest developments, discussing their impact and offering some practical considerations on how businesses may wish to prepare for the changes.

Please feel free to register via the below link, if you or your colleagues would like to attend:

https://www.eventbrite.co.uk/e/returning-to-work-advice-for-employers-tickets-106908795084