Coronavirus Job Retention Scheme (CJRS) extended to end of October
The latest update from the Chancellor has confirmed that the JRS is set to be extended another 4 months until the end of October, with no reduction in the level of support, being 80%/ £2,500 a month cap, but the scheme will be flexed between August and October to allow for part-time work with the sharing of the cost of this flexibility with Employers after the end of July.
This and any future decisions around the scheme will take into account the wider context of any lockdown extension, as well as the public health response, so that people and businesses can get back to work when it is safe to do so.
To support that aim, furloughed staff returning to work part time will have their wages “topped up” by the government, so that businesses are incentivised to gradually bring staff back to work whilst remaining alert to the control of the virus and social distancing rules, as operations are slowly built back up.
The CJRS has already provided unprecedented support for businesses to help pay employee wages, avoid unnecessary lay-offs and redundancies and ensure that employers have employees ready to resume work after the crisis and has been essential and hugely successful.
The scheme has been, and will be used to support millions of furloughed workers and hundreds of thousands of employers at a cost of tens of billions of pounds. However, it is impossible to sustain the scheme indefinitely at the current level of funding so radical reform was required.
So, whilst the Government has acknowledged that the UK is ‘past the peak’ of the Coronavirus outbreak, and sectors like Construction and Manufacturing can start to have employees who are unable to work from home return to the workplace, there are still wide ranging restrictions on travel and the need for social distancing remains. The message for much of the UK is still “stay at home” and the move away from that will be gradual, starting mainly from 1st June, with some schools and shops re-opening, before further possible relaxations from July.
It is looking like a real Summer of Discontent which may be made glorious by Winter, though we can expect a number of seasons to pass before we start to truly recover from the effects of the virus.
The announcement is good news and provides a basis for businesses to start making plans to re-open their doors and resume trading post lockdown and through the future recovery stage.
However, there will be a big learning curve for businesses and their employees as we move towards the ‘new norm’ and there are a number of key aspects to consider to ensure plans continue to receive financial support from the Government, and, in particular, from the Coronavirus Job Retention Scheme (CJRS).
Moving out of lockdown and re-opening for business will mean very careful management of the CJRS rules, particularly where employees return ‘part-time’.
The above, along with the complexities associated with calculating the claim and remaining compliant will mean that businesses must fully assess:
- How to manage un-furloughing workers and maintain optimal operational performance and fairness to all employees?
- Potential phased customer activity and associated staffing levels post 1st June
- How to remunerate employees after 31st July when CJRS scheme moves to the new rules, but turnover is still low or gradually increasing
- Additional costs not funded from Government schemes and the potential alternatives e.g. reducing pay, deferring payments, redundancy and the cost of statutory notice and redundancy pay v enhanced notice and redundancy pay
- What has been learned through any limited trading during lockdown, new or proposed ways of working and any potential staff redeployment and training needed
The overall message, however, is that the Government will provide assistance to both employers and employees. They are urging businesses not to make permanent redundancies.
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If you have any queries, or would like to discuss your requirements for the next step, please contact:
Nigel Morris, Employment Tax Director, email@example.com, Tel: 07718 340634
Richard Maitland, Employment Tax Partner, Richard.firstname.lastname@example.org, Tel 07711 373584
Stephanie Pote or Colin O’Kane, Senior HR Consultants, HRSolutions@mhllp.co.uk
The above guidance is provided for your information and is our summary of the latest position as we see it. You should seek appropriate legal and technical advice in relation to your own specific circumstances before acting on the above.
Please also note that Government advice is being updated on a daily basis.
If you are concerned about being impacted financially due to the Coronavirus, we are here to support you or if you require more specific advice on your situation and how the COVID-19 pandemic may affect your business. Visit our COVID-19 business advice page to see how we can help.