The CJRS was creates to assist businesses suffering a detriment due to the global pandemic.
The current rules published when the scheme was first created will apply until the 30 June 2020.
· Employees and workers employed and noted on the businesses real time information (RTI) payroll submissions as at the 28 February or 19 March 2020 would qualify for furlough leave.
· Staff can not work whilst furloughed (they can complete training);
· Staff must be furloughed for a minimum of 3-week blocks;
· Businesses can claim back 80% of wages up to a cap of £2,500 per month from the 1 March to the 30 June 2020.
Amendments effective from the 1 July 2020
To be eligible for the grant for periods after 1 July, the employee or worker must have been furloughed for a minimum of one consecutive 3 weeks period to the end of June. The last day to furlough someone was therefore 10 June 2020.
Staff must have been furloughed at some point during the period of 1 March to 30 June but does not necessarily need to be on furlough on the 30 June.
There are exceptions to the new rules and those are in respect of staff returning from any statutory family leave and or long-term sick leave. (Guidance pending)
NEW RULES FLOW CHART
From 1 July onwards flexible furlough will commence, and the grant amounts remain the same.
From 1 August onwards employers can claim 80% of pay but not employers NI and pension contributions and the cap remains at £2,500 per month.
From 1 September employers can claim 70% of the employees pay and the cap reduces to £2,187.50 per month.
From the 1 October employers can claim 60% of the employees pay and the cap reduced further to £1,875 per month.
Note well that furloughed employees are still entitled to 80% of pay until October 31 and the employer is required to top up the balance to the minimum 80% in respect of furloughed time.
Minimum Furlough periods
· From the 1 July the minimum 3-week periods will no longer be in place for furloughed employees/workers.
· Staff may be brought back to work on any hours or work pattern as agreed mutually.
· Staff can be furloughed for the balance of hours not worked.
· All variations must follow established employment law practices.
Furlough maybe used where:
1. Health and Safety is an issue i.e. the business is unable to bring everyone back at the same time;
2. Lower productivity /workload or customer base;
3. The business has only reopened partly;
4. There are other roles staff could do that are not their normal duties;
5. Where the employee’s personal circumstances creates a challenge for return to work e.g. childcare or care of a dependant (elderly).
Though flexible furlough is possible from the 1 July, businesses do not have to use it.
You may still fully furlough staff until the end of October but as a business you will be required to start paying a contribution.
Any time spent on furlough is based on the same rules as they are currently which is no work for the employee but they may still use holiday during these periods.
From 1 July onwards you can only make claims for the relevant calendar month. All claims in respect of July must be made by the end of July.
The last day to submit claims in respect of 1 March – 30 June is on or before 31 July.
The minimum claim period is 7 days (unless the last or first day of the month is included in the period and you claimed for the period immediately before due to the claims having to be concluded by the end of the month).
Otherwise the claim process remains the same.
The calculation of wages through usual/ variable hours also remains the same, and workers are entitled to furlough as they have been to date.
You can still fully furlough people, up until 31 October if you wish.
All staff furloughed at some stage in a pay period should be included in the claim for that period, even if they were for different lengths of time.
EMPLOYERS MUST KEEP A RECOD OF:
1. The usual hours the individual would work during any claim period
2. The hours the individual will work/ has worked in that claim period
3. The hours the individual was furloughed for in that claim period
These records must be kept for 6 years.
You must also keep a copy of the written flexible furlough agreement with the individual for at least 5 years.
Claims made in any single period from 1 July may not exceed the maximum number of employees claimed for before 30 June.
For example, if you have claimed in one period for 40 employees, one period for 30 employees, and one period for 60 employees, the maximum staff you can claim for going forwards in one period will be 60 staff. The only exception to this rule are staff returning from family leave.
The things you can claim for (i.e. wages, non-discretionary commissions, non-discretionary bonuses) remain the same. In the same respect things, you cannot claim for (i.e. discretionary bonuses).
You can still claim for employer’s NI and pension contributions on the 80% rate of the furloughed hours in July – this will change from 1 August.
If you are fully furloughing an employee or worker, you may claim in the same way as normal.
If you are flexibly furloughing them:
Work out what would have been their usual hours in that period (either the last full pay period before March 2020 or, if variable, the higher of March 2020 of the equivalent month last year)
Work out how many hours they will be working and how many will be furloughed hours.
If you are fully furloughing staff, you claim in the same way as before.
If you are flexibly furloughing staff:
Work out what would have been their usual hours in that period (either the last full pay period before March 2020 or if variable the higher of March 2020 or the equivalent month last year)
Work out how many hours they will be working and how many are furloughed hours.
Employers are responsible for paying staff for the non-furloughed hours.
For the furloughed hours, employers can claim 80% (to the cap, as amended) through the CJRS portal.
Employers can only claim the NIC’s / pension in July in respect of the furloughed hours.
You should wait until the end of a period before making a claim to ensure no hours have changed.
For anyone returning from family /sick leave, the pay is based on their original salary pre-leave.
There is now a process in place to correct errors made, either by way of overpayment or underpayment (if underpayment occurs please contact HMRC)
Where errors have been made and no further claims are made a process is being created and put in place.
HOW TO NOTIFY EMPLOYEES & WORKERS OF RETURN TO WORK
Employees should write to furloughed staff:
· Provide them with reasonable notice of return to work
· Confirm employment will recommence on original pre furlough terms
· Confirm start date and time
· Confirm all procedural changes to ensure safety at work in line with government guidance and any training needed on PPE and new safety measures as required.
· Confirm all in both writing and verbally with a telephone or zoom call.
Employers now have more options:
a. Keep staff on furlough under any current agreements
b. Return staff to work full time or on their normal hours prior to lockdown
c. Use flexible furlough and therefore staff and employers will need to mutually agree new variations of terms.
d. Gain consent for any new arrangements you as the employer wish to use.
Clarity is essential with any arrangements:
· Employers must be clear with staff about hours they are required to work and what hours will be furlough hours.
· Employers must explain what staff will be paid for any hours actually worked.
· If there is a likely hourly rate or salary reduction this must be dealt with through a separate consultation and agreement process first.
· Employers should consider any care or dependent obligations staff may have and address any safety concerns directly with staff.
· If staff consent the agreement must be made in writing and a copy of the agreement retained for 5 years.
· Normal employment law and discrimination rules apply so all decisions must not breach any statutory law.
Harries HR can provide your Company with pay as you use advice and letter templates, tailored policies and procedures to support you and your employees with all employment and Furlough matters.
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