Coronavirus Job Retention Scheme (CJRS) or ‘Furlough Scheme’ Updates – Summer 2021

23-07-2021


The government recently announced several changes to the Coronavirus Job Retention Scheme (CJRS) – commonly known as the ‘Furlough Scheme’. These commenced on 01 July 2021 in preparation to wind the Scheme down by the autumn.

Until 01 July 2021, furloughed employees were entitled to 80% of their wages (up to a maximum of £2,500 per month) for hours not worked, which could be claimed by their employer through the scheme. From 01 July 2021, the government’s contribution to wages will be changing, however furloughed employees are still entitled to receive 80% of their wages (up to the £2,500 maximum) for hours not worked. This means that employers will have to pay the shortfall.

Key points and considerations are summarised below:

From 01 July 2021, the government’s contribution to wages for hours not worked decreases to 70% (up to a maximum of £2,187.50). Employers will contribute 10% (up to a maximum of £312.50).

Employers are responsible for national insurance and auto-enrolled pension contributions. Employers can still choose to top up employees’ wages above the 80% threshold.

From 01 August 2021, the government’s contribution to wages for hours not worked decreases again to 60% (up to a maximum of £1,875). Employers will contribute 20% (up to a maximum of £625).

Employers are responsible for national insurance and auto-enrolled pension contributions. Employers can still choose to top up employees’ wages above the 80% threshold.

This will carry through to September 2021.

The government’s current plans are for the Furlough Scheme to end on 30 September 2021. From that point, employers will bear all employee costs. Accordingly, it is important for employers to review their current structure and have robust plans in preparation for these changes. Below are some key points to consider:

You can find the information on gov.uk here.

For further advice about what these changes mean for your business, please contact a member of our Employment team.


Julie Taylor

Partner
Employment Law

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