The Coronavirus Job Retention Scheme (CJRS) has enabled employers to access support to continue paying part of their employees’ salary by ‘furloughing’ employees.
The idea is to encourage employers to keep employees on, rather than make them redundant. In March 2021 it was announced that the furlough scheme would be extended until the end of September 2021, but with some key changes to funding levels. From July through to the end of September 2021, employers will have to cover a portion of the employee’s actual wages as well as the national insurance and pension contributions.
The current position
Currently, and until the end of June 2021, employers can claim a grant of up to 80% of an employee’s wages up to a monthly cap of £2,500. This means that employees on furlough will get 80% of their wages per month. Where an employee is on flexible furlough, they will be paid in full by their employer for the hours they work, and the grant will cover 80% of pay for their unworked hours (subject to the monthly cap).
From 1 July 2021
From 1 July 2021, the CJRS grant will reduce to 70% of furloughed employees’ wages for their unworked hours up to a monthly cap of £2,187.50. Pay for furloughed employees must remain at a minimum of 80% (and subject to a monthly cap of £2,500), which means that employers must contribute 10% to staff wages up to £312.50 per month.
From 1 August 2021
From 1 August 2021 until the scheme ends at the end of September 2021, the CJRS grant will reduce to 60% of furloughed employees’ wages for their unworked hours up to a monthly cap of £1,875. Employers will therefore need to contribute 20% to staff wages up to £625 per month.
From 30 September 2021
As things currently stand, the furlough scheme is set to end on 30 September 2021. After that date, you will have to start paying your furloughed employees their normal salary. If you think you will struggle, now is the time to start planning how to deal with this. If you need advice and support, our specialist employment solicitors can talk you through your options.
How can Tozers help?
If you would like help and support around the furlough scheme, contact our specialist solicitors.
