The government has confirmed that the Coronavirus Job Retention Scheme (the “CJRS” or “Furlough Scheme”) will remain in place until 30 September 2021, and has published updated guidance setting out the rules which will apply for the remaining months of the scheme.
Key points from the updated guidance are that:
- The CJRS has been extended until 30 September 2021. However, the amount of government contribution towards furloughed employee’s wages will be reduced in the last few months of the scheme, and employers will have to increase their contribution to make up the difference.
- Until 30 June 2021 the level of government grant available to employers under the scheme will remain at the pre-existing level. That is, a contribution of up to 80% of furloughed employees’ wages, up to a cap of £2,500 per month, for the time they spend on furlough. Employers can continue to choose to top up furloughed employees’ wages above the 80% total and £2,500 cap for the hours not worked, at their own expense.
- From 1 July 2021 the level of government grant will begin to taper down, and employers will be required to contribute an increasing percentage of the cost of their furloughed employees’ wages. To continue to be eligible for the grant, employers must continue to pay their furloughed employees at least 80% of their wages, up to a cap of £2,500 per month. The government contribution to furlough pay will reduce as follows:
- From 1 July 2021, to 70% (up to a cap of £2,187.50) per month, with employers having to contribute the remaining 10% (up to £312.50) per month.
- From 1 August 2021 (until the end of the scheme on 30 September 2021), to 60% (up to a cap of £1,875) per month, with employers having to contribute the remaining 20% (up to a cap of £625) per month.
- Employers will remain liable for payment of National Insurance contributions and pension costs incurred on the full value furlough pay.
In addition to the above, there have been some slight changes to the eligibility requirements for, and rules of, the scheme; though much remains the same. We explore some of the key points in the full guide.
This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.
All content on this page is correct as of April 19, 2021.