The Coronavirus Job Retention Scheme will end on 31 October 2020, with employers required to start contributing from August 2020 and a new flexible furlough option available from July 2020.(1)

The latest developments are as follows:

  • The Coronavirus Job Retention Scheme will close on 31 October 2020. It is now too late to furlough employees for the first time, unless they are returning from maternity or other family leave or service as an armed forces reservist.
  • Any furlough arrangement from 1 July 2020 will be treated as a flexible furloughing arrangement. This is to enable employees to return to work on a part-work, part-furlough basis. Employees will be paid their normal wage for work performed and will receive the furlough grant for the remainder of their usual working hours. Any holiday taken during a flexible furlough period is to be treated as furlough, even if it is on days that the employee was otherwise due to work.
  • Flexible furloughing arrangements use a complex set of calculations which require employers to calculate the baseline number of 'usual hours' so that they can be compared with the actual hours worked. The flexible furloughing calculations can be avoided only if an employee is furloughed for the whole of the claim period.
  • For June 2020 and July 2020, the government will pay 80% of wages up to a cap of £2,500 for the hours that employees are furloughed, as well as employer national insurance and pension contributions for the hours that employees are furloughed. Employers will have to pay employees for the hours that they work.
  • From 1 August 2020, employers must contribute employer national insurance and pension contributions. In September 2020 employers will also be required to contribute 10% of wages and the government will contribute 70%. In October 2020 the employer contribution will increase to 20% and the government will contribute 60%.
  • All claims for the period ending 30 June 2020 must be completed by 31 July 2020. Claims for the period from 1 July 2020 cannot be made until 1 July 2020.
  • From 1 July 2020, claims cannot straddle two calendar months and the number of employees that an employer can claim for in any claim period cannot exceed the maximum number that they have claimed for under any previous claim (plus those returning from maternity or family leave or armed forces reserve roles).
  • The government has announced a new job retention bonus of £1,000 for every worker who is brought back from furlough.(2)

Endnotes

(1) Comprehensive FAQs for employers on the Coronavirus Job Retention Scheme is available here.

(2) For further information please see "Government to pay bonus for retaining furloughed workers".