Three months have now passed since Chancellor, Rishi Sunak, announced to the Coronavirus Job Retention Scheme (the Scheme) which ends on 31 October 2020.
From 1 August 2020, employers have had to start paying employer’s national insurance contributions and employer pension contributions as a condition of their continued participation of the Scheme.
From 1 September 2020, employers see a further increase to the contribution required with the change that the government will only reimburse 70% of salary (up to a maximum of £2,187.50) in respect of furloughed employees for the time they spend on furlough. Employers will now be required to top-up furloughed employees’ salary to 80% (subject to the £2,500 limit), or more, depending on what is agreed between the employer and employee within the furlough agreement.
In terms of what’s next, from 1 October 2020, the government will only reimburse employers 60% of employee salary (up to a maximum of £1,875) for the time furloughed employees spend on furlough until the Scheme draws to a close. As such, employers will be required to top up furloughed employees’ salary to 80% (subject to the £2,500 limit), or more, again subject to what has been agreed privately between employer and employee.
There has been discussion as to whether some version of the Scheme might be maintained beyond 31 October 2020 for certain sectors. Whilst speculation continues, there have been no official announcements to this end and we will provide a further update if any developments arise.
We will continue to update you as the Scheme winds down to a close. In the meantime, if you'd like more advice on the topic, please contact a member of our Employment Law team.
This contains a general overview of information only. It does not constitute, and should not be relied upon, as legal advice. You should consult a suitably qualified lawyer on any specific legal problem or matter.
