WHAT NEXT FOR FURLOUGH?

RMT helpline 0800 376 3706 :: july/august 2020 :: RMTnews 12 The government introduced the Coronavirus Job Retention Scheme (“CJRS”) known as the Furlough Scheme with effect from March 2020. Furloughed employees are those being kept on but with no work to do. Employers are able to recover 80 per cent of their employees’ wages through HMRC. At present this is with effect from March for a three month period, but this may be extended. It is a temporary scheme. The Furlough Scheme only applies to PAYE employees on the payroll on February 28 2020. The government has issued Guidance regarding the Furlough Scheme which is regularly updated sometimes in the Guidance to employees and sometimes in the Guidance to employers. Additionally the Treasury has issued two Directions. There are still not answers to all potential questions and issues. Further Government Guidance is likely which may impact on the summary below. The Furlough Scheme The intention of the Furlough Scheme is to save jobs and protect employees’ pay by paying part of their salary for those employees that would otherwise have been laid off. THE FURLOUGH SCHEME IS CHANGING From 1 July 2020 employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week. The scheme will close to new entrants from June 30 2020. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to June 30 2020. From August 2020, the level of government grant provided through CJRS will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80 per cent of people’s salaries. In the following months, businesses will be asked to contribute, but employees will continue to receive 80 per cent of salary covering the time they are unable to work. The scheme updates mean that the following will apply for the period people are furloughed: • June and July: The government will pay 80 per cent of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything. • August: The government will pay 80 per cent of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions. • September: The government will pay 70 per cent of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80 per cent total up to a cap of £2,500. • October: The government will pay 60 per cent of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20 per cent of wages to make up 80 per cent total up to a cap of £2,500. To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing. Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. From 1 July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. An employee cannot undertake work for their employer while on furlough. The Self Employed Income Support Scheme has also been extended. ELIGIBILITY Both the employee and employer must agree to furlough. If the employer and a trade union reach collective agreement that is acceptable for the purpose of the employer claiming through the scheme. Once agreed the employer must confirm in writing that the employee has been furloughed WHAT NEXT FOR FURLOUGH? RMT legal department outlines how the government’s job retention scheme will change through the rest of the year