Covid-19 - We are open for business and here to help ->
Call us free on⠀ 0808 164 1510 WOKINGHAM⠀ 0118 978 0099 READING⠀ 0118 957 3425 FARNHAM⠀01252 733733

UPDATE TO THE CORONAVIRUS JOB RETENTION SCHEME (the “Scheme”)

covid 19 job retention

On Friday 29 May, the Chancellor, Rishi Sunak, announced how the Scheme will operate between 1 July and the end of the Scheme on 31 October 2020. Mr Sunak has made it clear that the Scheme is not intended to extend beyond 31 October 2020 by which point the unprecedented Scheme will have covered eight months.

Scheme to close to new entrants

The Scheme will close to new entrants from 30 June 2020.  From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three week period prior to 30 June 2020. This means that the last day on which an employer can place an employee on furlough under the Scheme will be 10 June 2020, so that the initial three week furlough period is completed by the cut-off of 30 June 2020.

Flexible furlough

Flexible furlough will be introduced from 1 July 2020, to allow employers to bring employees back to work on a part-time basis. Employers will be able to decide how the time split will operate in terms of the amount of time and shift pattern. The employer would pay their employees for their part-time hours.  The employees would remain under the Scheme for the remainder of their time.

Scale back of Government support

Although furloughed employees will continue to be entitled to receive 80% of wages (subject to the £2,500 monthly cap) through to the end of October, Government support under the Scheme will be gradually scaled back from 1 August 2020 as follows:

  • from 1 August 2020, employers will have to pay employer national insurance contributions and pension contributions. They will no longer be able to reclaim them through the Scheme.
     
  • from 1 September 2020, employers will have to pay 10% of furloughed salary as the Government will only reimburse 70%. Of course, if the employer has agreed to pay furloughed employees more than the 80% of wages (subject to the £2,500 monthly cap) covered by the Scheme, the employer would have to top up to the agreed amount.
     
  • from 1 October 2020, employers will have to pay 20% of furloughed salary as the Government will only reimburse 60%. Again this is subject to any agreement with the employee that they would receive more than the 80% of wages (subject to the £2,500 monthly cap) covered by the Scheme.
     
  • the Scheme will close on 31 October 2020.

The above changes bring with them some uncertainty as the Scheme is currently concealing the true economic situation for employers and their employees. It is providing financial support to employers who would otherwise be considering redundancies or closure of the business.

If you have any queries regarding the Scheme or what the above changes mean for you, please contact our Employment Team.

This article is written as a general guide and believed correct at the date of publication. If you need further or more specific information relating to your situation, please get in touch with us.

Tyla Robins joins the Wills & Inheritance team
The Corporate Insolvency Governance Bill Published...

Wokingham Office

22-24 Broad Street
Wokingham
Berkshire RG40 1BA
United Kingdom

Telephone

0118 978 0099

Reading Office

County House, 17 Friar Street
Reading
Berkshire RG1 1DB
United Kingdom

Telephone

0118 957 3425

Farnham Office

11 South Street
Farnham
Surrey GU9 7QX
United Kingdom

Telephone

01252 733733

ci2

Contact us today

Name Please let us know your name.
Email Please let us know your email address.
Telephone Please enter a valid telephone number
Office Location Preference Invalid Input
Where did you hear about Clifton Ingram Invalid Input
Message Please let us know your message.
Please confirm if you wish to receive legal updates and event invitations.
Stay connected with Clifton Ingram Solicitors
I would like to occasionally receive free legal updates and event invitations.
View our Privacy Policy here