For those that may have missed it, next Wednesday is an important day for the furlough scheme. For many, the Coronavirus Job Retention Scheme has been a lifeline, however changes are afoot and it’s all too easy to miss the finer detail which sits underneath the daily briefings.
Although the government confirmed that the scheme would stay in its current form until the end of July, that’s not quite true. In short, the scheme is closing to new entrants on 30 June and, as there is a requirement for furlough to be a minimum of three weeks, if you haven’t furloughed employees by 10 June (ie on or before 9 June, we’d say), you won’t be eligible for the reimbursement of their wages under the scheme if you furlough them for the first time on or after this date.
With that in mind, it’s definitely worth a bit of forward planning over the next few days. If it’s likely that business is going to take a further dip, it might be wise to take the plunge yourself. Don’t forget though, furlough shouldn’t be a unilateral decision; employees need to agree so leaving it until the last minute to make a decision is very risky indeed.
Aside from that, we now have broad details of the ‘part time’ approach to furlough which will be adopted from 1 July, which is designed to wean employers off the scheme. Employers can bring employees back to work on a part time basis, paying them for the hours which they actually work and claiming furlough payments for the hours that remain unworked. In tandem with this, the amounts payable by the government will start to drop from 1 August. The first thing to go is the government’s contribution to employer NI and pension contributions. There will then be a staged reduction in the amount of salary reimbursed - down to 70% in September and 60% in October. The £2,500 cap will also be reduced accordingly.
For those using the furlough scheme, the second version of the Treasury Direction - the formal document which actually sets out the rules - was published on 22 May. Claims from this date must meet the criteria set out in the direction so it's important to review the latest version. Here's a handy link to it: CJRS Treasury Direction v.2
If you are considering bringing staff back to work, there’s lots to think about. Don’t forget that there will still be huge anxiety amongst employees and workers as to whether they’ll be safe, and individuals may have personal circumstances that warrant a different approach to the one you want to implement. In particular, the overwhelming message is still that for those who can work from home, they should.
As ever, if we can help and support you in managing these issues, please get in touch with someone from the Employment Law Team.