Changes to the Coronavirus Job Retention Scheme

As the Covid-19 restrictions continue to ease, the National Golf Clubs Advisory Association looks at the changes to the Coronavirus Job Retention Scheme (CJRS) relating to furlough that will operate from July 1, 2020 to October 31, 2020.

The government has produced three new guidance documents and updated six of its existing guidance documents, which we have sought to condense into the notes below. Whilst we have pulled together what we view as the most salient points, we would strongly recommend that club managers read the full guidance documents in order to obtain the full picture (links to the new documents below).

The CJRS will close on October 31, 2020, with tapering levels of support for employers until then.

From July 1, ‘flexible furlough’ will operate. This means that employers can bring furloughed employees back to work part-time, whilst their remaining time can be furlough, with the CJRS grant being available for that element of time spent on furlough. Time spent at work should be paid by the employer.

Employers have the discretion to decide how much time an employee works versus how much time they are furloughed. As before, the parties will need to reach agreement on this, confirm it in writing and retain records for five years.

The minimum three week period for furlough has been removed (as of July 1, 2020).  There is no minimum period, although any claim through the CJRS portal must be in respect of a minimum one week period.

The wage caps for the claim under the CJRS, set out below, will be reduced proportionally to the hours that an employee is part-furloughed, such that an employee is only entitled to, say, 50 percent of the £2,500 cap if they are placed on 50 percent of their usual hours.

There will be changes to the amount of the grant payable from the government under the CJRS, as follows:

• July 2020: Employers will be required to pay employees in full for the hours worked. They can continue to claim for 80 percent of the employee’s salary, capped at £2,500, and the employer national insurance contributions (NICS) and pension contributions on the furlough pay for the hours not worked.

• August 2020: Employers will be required to pay employees in full for the hours worked. Employers will be required to pay the employer NICs and pension contributions on the furlough pay, but can continue to claim for 80 percent of the employee’s salary, capped at £2,500, for the hours not worked.

• September 2020: Employers will be required to pay employees in full for the hours worked. They will be required to pay the employer NICs and pension contributions on the furlough pay and 10 percent of the employee’s furlough pay, capped at £312.50. HMRC will pay 70 percent of the employee’s furlough pay, capped at £2,187.50, for the hours not worked.

• October 2020: Employers will be required to pay employees in full for the hours worked. They will be required to pay the employer NICs and pension contributions on the furlough pay, and 20 percent of the employee’s furlough pay, capped at £625. HMRC will pay 60 percent of the employee’s furlough pay, capped at £1,875, for the hours not worked.

Employers will have additional record-keeping requirements placed upon them from July 1. This means that employers will be required to keep records of the usual hours that their employees work, including any calculations that are required for employees who flexibly (part-time) furlough. Records should also be kept of the actual hours worked for employees who are flexibly furloughed.

The three new government guidance documents are linked below. The first one expands upon the matters we have highlighted above, whilst the second two cover the financial calculations and some very useful worked examples. The guidance goes on to provide calculation methods for both fixed and variable hours employees, which should assist golf club managers with the varied working arrangements they operate within clubs.

Further reading: HMRC policy paper: Changes to the Coronavirus Job Retention Scheme (published 12
June 2020); HMRC guidance: Steps to take before calculating your claim using the Coronavirus Job Retention Scheme (published 12 June 2020); and
HMRC guidance: Calculate how much you can claim using the Coronavirus Job Retention Scheme (published 12 June 2020).

Those golf clubs who plan to flexibly furlough staff after July 1, 2020 should be aware that the method for calculating and claiming the CJRS grant will be different and potentially more complex. We advise that managers become familiar with the process as soon as possible by consulting the government guidance linked above.

For any further advice on furlough, employment law other legal matters affecting your golf club, please contact alistair@ngcaa.co.uk or call 01886 812943.