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arrangement with employees, as the coronavirus (COVID-19) lockdown is eased and funding under the scheme is gradually withdrawn.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 and can claim under the scheme for the hours they remain on furlough.

From 1 August 2020, the scheme continues 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.