Update to to the Job Retention Scheme

Monday June 22, 2020

Here at RIFT Accounting, we are always keeping you up to date with changes to the various Government schemes at this time.

Details of the latest change to the Job retention scheme (JRS) are shown below;

With effect from 01 July, employees who have previously been furloughed under the JRS for at least 3 consecutive weeks can return to work on a flexible part-time basis.

Until the JRS closes on 31 October (unless it is further extended), these employees will be entitled to receive:

• Their full contractual pay in relation to any part-time hours worked; and
• 80 percent of their salary (capped at £2,500 per month pro rata) in respect of their non-working time.

If you have employees returning to work on this basis, then you must bear the contractual salary costs of any part time hours worked by a furloughed employee, together with the associated employer’s NIC and minimum pension contributions.

Where the employer agreed to make any discretionary ‘top up’ payments to furloughed workers, the cost of these payments – and the associated employer’s NIC and pension contributions – will be borne by the employer as at present.

Employers must also enter into new written furlough agreements with employees who are to work on a part time basis whilst furloughed. This must be done in accordance with existing employment law.

Calculating and submitting claims

Claims under the new JRS can be submitted from 1 July 2020

When submitting claims in respect of an employee on flexible furlough, the employer will be required to include information on actual hours worked, as well as the usual hours that the employee would have been expected to work under their contract in the relevant claim period. This information will feed into the calculation of the maximum JRS grant

A minimum claim period of one week will apply under the new JRS, though claims can still be submitted in respect of longer periods. However, claim periods will no longer be able to overlap calendar months.

Importantly, from 1 July the number of employees included in a claim cannot exceed the highest number of employees included in a claim submitted under the current scheme.

What should employers do now?

Employers should urgently consider how these changes to the JRS will affect their businesses, and the practical implications for return to work planning.

Specifically, employers should start to think about:

• Their workforce requirements over the next five months, taking account of their currently furloughed workers could be able to return to work part time, and which could not (e.g. those who are shielding)
• What support the JRS can offer during that period;

If you require any further information, please contact us at RIFT Accounting