Job Retention Support Scheme updates

Job Retention Support Scheme updates

The Coronavirus Job Retention Scheme has been in place since March 2020 in order to assist employers who could not maintain their workforce because their operations have been affected by coronavirus. Use of the scheme has been substantial and continues to be so, but the Government has been adamant that it cannot go on forever. The scheme is currently expected to end in October 2020.

Here’s a quick recap of changes to date and future expected changes.

What changed in July?

Previously furloughed staff could be asked to return to work on a part-time basis (“flexible furlough basis”) as well as remain on furlough or return to work fully. New staff can no longer be furloughed, unless returning from family leave.

What changed in August?

Employers were asked to pay employer National Insurance (NI) and pension contributions of furloughed workers’ wage costs in relation to the hours that the worker did not work. This had very little or no impact for the majority of our clients (as indeed the wider small business community) as the employment allowance will have covered the additional costs incurred in most cases.

What changes in September?

From 1 September, further contributions from employers are needed.

On this date, the Government’s grant decreased to cover 70% of furloughed employee wages at a reduced cap of £2187.50. Employers are now expected to top up the remaining 10%, up to a maximum of £312.50 per month, as well as continue to pay employer NI and employer pension contributions.

What changes in October?

From 1 October the Government will further decrease its grant contribution and will only cover 60% of furloughed employee wages at a cap of £1875. This means that employers will need to top up the remaining 20%, up to a maximum of £625 per month. Employer will also be expected to continue to pay employer NI and employer pension contributions.

What happens after 31 October?

Despite calls for them to do so, the Government has confirmed that the furlough scheme will not be extended past 31 October in any capacity. As such, employers need to be ready for when the scheme does finally come to an end. As an incentive to encourage them to retain staff, the Government have established the Job Retention Bonus, which we discuss in a separate article.

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