How is the Coronavirus Job Retention Scheme changing between 1 July 2020 and 31 October 2020?

Government guidance on the Coronavirus Job Retention Scheme sets out how the operation of the scheme will change from 1 July 2020 until it closes at the end of October 2020. Employers have the option of agreeing a flexible furlough arrangement with employees, as the coronavirus (COVID-19) lockdown is eased and funding under the scheme is gradually withdrawn.

Under the flexible furlough scheme, from 1 July 2020, employees who have previously been furloughed can work part time for their employer. The employer is responsible for paying their full wages for the hours they work. The employer will be able to claim under the Coronavirus Job Retention Scheme for employees' wages for the normal hours that they do not work (ie hours they remain on furlough). During July, the funding available from the scheme for the time when the employee is not working will remain the same, at 80% of employees' wages up to a maximum of £2,500 per month, plus the employer national insurance contributions (NICs) and the minimum automatic enrolment employer pension contributions due on the subsidised wage.

From 1 July 2020, the minimum period for which an employer can claim is one week. There are no restrictions on the number of hours or working pattern that an employee can work. Any arrangement for the employee to return to work on a part-time basis must be agreed with the employee and confirmed in writing.

From 1 August 2020, the scheme will continue to cover 80% of employees' wages (for the hours they do not work), up to a maximum of £2,500 per month, but the employer will be responsible for paying the employer NICs and employer pension contributions.

From 1 September 2020, the scheme will cover 70% of employees' wages (for the hours they do not work), up to a maximum of £2,187.50. As a minimum, the employer must pay 10% of the employee's wages, so the employee continues to receive 80% of their normal wages, up to the maximum of £2,500 (although employers may top this up further). The employer will be responsible for the employer NICs and pension contributions.

From 1 October 2020, the scheme will cover 60% of employees' wages (for the hours they do not work), up to a maximum of £1,875. As a minimum, the employer must pay 20% of the employee's wages, so the employee continues to receive 80% of their normal wages, up to the maximum of £2,500 (although employers may top this up further). The employer will be responsible for the employer NICs and pension contributions.

The scheme will remain open until the end of October 2020, although it is closed to new entrants from 30 June 2020 (see When will the Coronavirus Job Retention Scheme close?).