With September now upon us we are seeing some changes in the way that the Coronavirus Job Retention Scheme (Furlough Scheme) will affect organisations.
Whilst in August employers had to pay the employee’s National Insurance contributions and pension contributions for their furloughed staff members and the government paid 80% of the their wages (capped at £2,500), this has now changed.
From 1 September 2020 the employer is responsible for:
- Still paying the National Insurance and pension contributions
- Also paying an additional 10% of furloughed employee’s wage. The government will continue to pay the remaining 70% (capped at £2,187.50) for hours not worked.
From 1 October 2020 the employer will be responsible for:
- Still paying National Insurance and pension contributions
- Paying 20% of furloughed employee’s wage with the government continuing the to pay the remaining 60% (capped at £1,875) for the hours not worked.
The Coronavirus Job Retention Scheme will come to an end on the 31 October 2020 and from 1 November, employers will be responsible for 100% of employee wage costs.
Job Retention Bonus
Back in July, the Chancellor announced that whilst no extension was likely to be made to the furlough scheme, detailed guidance would be published later this month, enabling employers to claim a ‘job retention’ bonus of £1,000 for each employee they bring back to work from furlough.
The employee must earn at least an average of £520 per month between the 1 November 2020 and 31 January 2021. There are likely to be some conditions including:
- The employee must have been eligible under the furlough scheme
- The employee must not be serving contractual or statutory notice that started before February 2021, even if still employed on 31 January.
There are questions still to be answered:
- What will be the impact on planned redundancies?
- Will this prompt discussions on bringing employees back on reduced hours or pay?
- What will happen in the event of another national (or local) lockdown; and
- What happens for employees who are still not in a position to return to work at the end of the furlough scheme (perhaps due to travel, childcare or health concerns)?
We will bring you updates as details of the scheme are unveiled.