A flexible return to work
Since 1 July, it has been possible for furloughed workers to return to work on a flexible part-time basis.
Until the closure of CJRS on 31 October, these employees will be entitled to receive:
- Their full contractual pay in relation to any part-time hours worked; plus
- 80 percent of their reference salary (capped at £2,500 per month pro rata) in respect of their non-working time.
However, an employee can only be furloughed on or after 1 July if they have been furloughed for at least three consecutive weeks at some point in time prior to that date.
Employers will continue to able to choose to top up employee wages above the 80% total and £2,500 cap for the hours not worked at their own expense if they wish.
Future changes to the CJRS
- From 1 August, the Government will continue to pay 80% of wages up to £2,500, however employers will pay employer National Insurance Contributions (ER NICs) and pension contributions.
- From 1 September, the Government will pay 70% of wages up to £2,187.50, and employers will pay ER NICs and pension contributions, as well as 10% of the wages to make up 80% total to a cap of £2,500.
- From 1 October, the Government will pay 60% of wages up to £1,875, and employers will pay ER NICs and pension contributions, as well as 20% of the wages to make up 80% total to a cap of £2,500.
Implications of flexible furlough for pension contributions
The Pensions Regulator(tPR) has published additional guidance for employers on how flexible furlough will work with pension contributions.
Employer and employee contributions
There is no change to how ordinary pension contributions should be calculated. Furlough pay, plus pay paid for hours worked should be combined, and pension contributions calculated based in the definition of pensionable pay and contributions agreed in pension scheme documentation, the employee’s contract of employment, or their flexible furlough agreement.
Calculating a CJRS claim for pension where flexible furlough applies
HMRC has produced guidance on the calculation of your claim for employer pension contributions if you use flexible furlough in July. There will be no claim due after 31 July as the CJRS will no longer cover pension contributions.
Content correct at the time of writing and is intended for general information only and should not be construed as advice.