Changes to the Coronavirus Job Retention Scheme
Monday, 01 June 2020
On Friday 29 May 2020 the Chancellor announced the changes to the Coronavirus Job Retention Scheme, also known as the Furlough Scheme. Almost 1 million businesses have benefited from the scheme currently in place which will end on the 30 June, making way for a more flexible scheme.
From 1 July businesses will have the flexibility to bring employees back to work part-time, whilst the Government will continue to contribute to any normal hours they don’t work. Additionally, there will not be a minimum period which you must furlough an employee for.
The contribution the Government will make is as follows;
- June - no change to the current scheme. The Government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions as previously calculated
- July - the Government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
- August - the Government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions
- September - the Government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
- October - the Government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
- The cap on the furlough grant will be proportional to the hours not worked. For example, if an employee works 3 days but normally works full-time they would be entitled to claim 2/5 of £2500 max grant
The scheme will be closed to new entrants from 30 June and only employees who have already been furloughed by 10 June will qualify. This means the final date you can furlough an employee for the first time will be 10 June in order to qualify for the current three-week minimum furlough requirement.
Employers will have to submit their claim for the period up to 30 June by the 31 July.
If you have any questions, please get in touch with your usual contact at MHA Larking Gowen, or email firstname.lastname@example.org