Coronavirus Job Retention Scheme – Updates From 1st July

June 17, 2020 3:34 pm Published by

First announced on March 20th, the Coronavirus Job Retention Scheme (often referred to as ‘furlough’ or ‘the furlough scheme’) is now covering 80% of the pay for over 9 million jobs across the UK.

A lifeline for many employers who have been impacted by the Coronavirus, the scheme that was originally due to end in June was extended until the end of October, with changes coming from 1st July to enable a gradual return to work.

Find out more about the changes to the Coronavirus Job Retention Scheme from 1st July and beyond.

What Is Changing?

From the 1st July, changes are being made to the Coronavirus Job Retention Scheme in order to enable a gradual return to the workplace.

From this date, employers will be able to bring back furloughed employees for any amount of time or work pattern, meaning they could return on a part time basis if required.

For the hours not worked, the employee will effectively be furloughed, meaning that the employer is still eligible to claim the grant for the hours not worked.

An important consideration for employers is that from the 1st July, they will only be able to claim the grant for employees that have previously been furloughed for the minimum 3 week period completed between 1st March and 30th June, effectively meaning that in most cases, the last day an employee could have been furloughed for the first time was 10th June.

Why Are These Changes Being Made?

As well as easing some of the financial burden on the treasury, the flexible aspect of the Coronavirus Job Retention Scheme means that employers can now bring back employees on a part time basis – without having to commit to funding all of their wages.

Previously, the Coronavirus Job Retention Scheme was rigid in that the minimum period an employee could be on furlough was 3 weeks, this made it difficult for employers trying to promote a phased return to the workplace.

Will There Be Any More Changes Before the Scheme Ends?

Yes, before the Coronavirus Job Retention Scheme end of the 31st October there will be further changes relating to employer contributions.

Starting from the 1st August, the amount that the Government pays will be reduced, leaving the employer to take on some of the cost.

For August, the Government will continue to pay 80% of the employee wage to £2,500 for the time the employee is on furlough, but the employer will need to pay the employee ER NICs and pension contributions for the hours the employee is on furlough.

For September, the Government will pay 70% of the employee wage to £2,187.50 for the time the employee is on furlough, the employer will top up the wages to ensure they receive at least 80% of their wages and will continue to pay the employee ER NICs and pension contributions for the hours the employee is on furlough.

For October, the Government will pay 60% of the employee wage to £1,875 for the time the employee is on furlough, the employer will top up the wages to ensure they receive at least 80% of their wages and will continue to pay the employee ER NICs and pension contributions for the hours the employee is on furlough.

July August September October
Government Contribution to NICs and Pension ContributionsYesNoNoNo
Government Contribution to Wages80% up to £2,50080% up to £2,50070% up to £2187.5060% up to £1,875
Employer Contribution to NICs and Pension ContributionsNoYesYesYes
Employer Contribution to WagesNoneAll employer NI and Pension Contributions10% to up to £312.50 plus all employer NI and Pension Contributions20% up to £625 plus all employer NI and Pension Contributions
Employee Receives80% up to £2,500 per month80% up to £2,500 per month80% up to £2,500 per month80% up to £2,500 per month

 

Please note that this information is correct at the time of writing and subject to change, please refer to the GOV UK website for up to date details of changes to the Coronavirus Job Retention Scheme.

Need a Hand?

At FCF, we have been supporting businesses throughout the Coronavirus pandemic to ensure that their furlough reclaims are successful. We hope that all businesses are able to utilise the schemes available to support them through this difficult time.

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This post was written by Steph Roffey

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