Second Treasury Direction issued and changes announced to the Coronavirus Job Retention Scheme
The second Treasury Direction was published on 22 May and dated 20 May and will apply to claims made under the Coronavirus Job Retention Scheme (CJRS) which are made after its publication, and to claims made on or before that date where they would have been compliant with its terms.
The requirement for an employee to agree in writing to be furloughed has been removed, but the employer must put in place a written furlough agreement setting out the employee's terms and conditions. This is then incorporated into their contract and retained until 30 June 2025.
Changes have been made to the interaction between furlough, statutory sick pay (SSP) and incapacity. The Direction clarifies (though perhaps not as clearly as we would have liked) that you can furlough someone who is shielding, as long as SSP is not being paid or due to be paid at the point that the employee is told they are being furloughed. It's worth noting that further updates should be expected as reference to the duration of the CJRS refers to an end date of 30 June 2020 even though the scheme has been extended to 31 October.
Meanwhile on 29 May the Chancellor of the Exchequer announced changes to the CJRS which will take place over the next few months. The CJRS is due to expire at the end of October and will close to new entrants on 30 June (the last three week furloughs before that point will commence on 10 June). Part time working (flexible furloughing) will be allowed under the scheme from 1 July. HM Treasury has published a factsheet which gives more detail as to how flexible furloughing will be implemented, and further guidance on flexible furloughing and how employers should calculate claims is due to be published on 12 June.
From August employers will have to pay NI and pension contributions, as of September they will have to pay 10% of wages (the government will contribute 70% up to a cap of £2,187.50) and this will rise to 20% in October (with the government contributing 60% up to a cap of £1,875).
For more information please refer to our newsflash 'An update on the Coronavirus Job Retention Scheme' .