Recent changes to the CJRS
How does Furlough work for September?
The Coronavirus Job Retention Scheme (CJRS) has allowed many businesses to retain their employees positions by placing them on furlough for an extended period. The scheme has had several reiterations including the addition of part-time furlough from 1 July 2020. However, in September further employer contributions are required to the employee’s salary, so what are the current rules exactly?
From 1 September 2020, the government will continue to pay 70% of wages to a cap of £2,187.50 for the hours that the employee is on furlough, (as part-time work can be undertaken). The employer is required to pay ER NIC’s and pension contributions and to top up the employee’s wage to ensure they receive 80% of their wage, to a cap of £2,500, for the furloughed hours.
This is a reduction from the 80% that the government originally covered at the start of the scheme.
For October, the government’s proportion will reduce again, to 60% of the employees wages, to a cap of £1,875 for the hours that an employee remains on furlough. Employers will need to cover ER NIC’s and pension contributions in addition to topping up the employee’s wage so they still receive 80% of their wage, capped at £2,500 for the hours they are furloughed.
Employers are still able to choose whether or not pay will be topped up from 80% to 100% of the employees wage.
The CJRS is currently due to end on 31 October 2020. No new employees can now be placed on the scheme unless they are returning from maternity, other family leave, or from service as a reservist with the armed forces. For employees who remain on the scheme until it finishes, pay must align with the scheme’s current rules. The government has also clarified that employees serving their notice period can remain on the scheme whether that notice is contractual or statutory.
If you require any furlough or employment law advice, please contact A City Law Firm. firstname.lastname@example.org