Chancellor outlines the future of furlough
Chancellor of the Exchequer Rishi Sunak confirmed important forthcoming changes to furlough and the Coronavirus Job Retention Scheme (CJRS). The announcement was followed by an HM Treasury factsheet which supplies further details on the CJRS, along with changes to support for the self-employed.
Changes to current furlough arrangements will start to take effect from 1st July 2020 (rather than 1st August).
The key changes announced by the Chancellor are:
- A deadline for putting individuals onto furlough for the first time. This deadline is Wednesday, 10th June.
- The introduction from 1st July of a ‘flexible furlough’ option.
- A gradual shift, from 1st August, towards lower UK Government contributions, and a requirement for some employer contributions, to workers’ ‘furlough pay’.
- Adjustments to the CJRS grant claims process from 1st July, most notably a cap on the number of furloughed workers an employer can claim for after this date.
On ‘flexible furlough’, the headlines are:
- From 1st July, employers can bring individuals back to work who have previously been furloughed for any amount of time and any shift pattern, while still being able to claim a CJRS grant for the ‘normal hours’ they are not working.
- To be eligible for a CJRS grant, employers must agree with each worker (and confirm in writing) any new flexible furloughing arrangement (including related changes to working arrangements).
For worked hours, individuals will be paid by their employer subject to their employment contract, and employers will be responsible for paying the tax and NICs due on those amounts.