As promised Rishi Sunak made a major announcement regarding the CJRS on Friday 29 May, the objective of which was to extend and taper the unprecedented wage and salary subsidy scheme. The Chancellor had already confirmed on Tuesday 12 May that the CJRS would be extended by a further four months to 31 October 2020 and at that time he had promised a substantial update before the month end.
It is worth taking a moment to remind ourselves of the size, scale, ambition and cost of this truly remarkable support measure. HM Treasury has now forecast that one in four UK workers will be furloughed during the Covid-19 crisis, which is just under 9 million employees employed by 1 million UK firms. The CJRS is costing the taxpayer circa £15 billion per month which far exceeds the original estimates by HM Treasury with the eventual price tag looking to be in the region of £100 billion.
The Chancellor announced three changes to the CJRS as follows. Please be aware that the last date by which an employee can be furloughed for the first time is 10 June:
1. Part time furloughing
From 1 July 2020 businesses using the scheme will have the flexibility to bring previously furloughed employees back to work part time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August.
Employers will decide the hours and shift patterns their employees will work on their return, and will be responsible for paying their wages in full while working. This means that employees can work as much or as little as the business needs.
Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, the employer will need to report and claim for a minimum period of a week. The employer can choose to make claims for longer periods such as on monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period together with actual hours worked.
If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.