Earlier this month, we reported that the Coronavirus Job Retention Scheme (JRS) was changing*. The Government has now provided details of the changes to the Scheme which will close on 31 October 2020.
From 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim JRS grant for the hours not worked.
From 1 August 2020, the level of grant will be reduced each month. To be eligible for the grant employers must pay furloughed employees 80 per cent of their wages, up to a cap of £2,500 per month for the time they are being furloughed.
The timetable for changes to the scheme is set out below. Wage caps are proportional to the hours an employee is furloughed. For example, an employee is entitled to 60 per cent of the £2,500 cap if they are placed on furlough for 60 per cent of their usual hours:
- There are no changes to grant levels in June.
- For June and July, the Government will pay 80 per cent of wages up to a cap of £2,500 for the hours the employee is on furlough, as well as employer National Insurance Contributions (ER NICS) and pension contributions for the hours the employee is on furlough. Employers will have to pay employees for the hours they work.
- For August, the Government will pay 80 per cent of wages up to a cap of £2,500 for the hours an employee is on furlough and employers will pay ER NICs and pension contributions for the hours the employee is on furlough.
- For September, the Government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80 per cent of their wages up to a cap of £2,500, for time they are furloughed.
- For October, the Government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80 per cent of their wages up to a cap of £2,500, for time they are furloughed.
Employers will continue to able to choose to top up employee wages above the 80 per cent total and £2,500 cap for the hours not worked at their own expense if they wish. Employers will have to pay their employees for the hours worked.
The table shows Government contribution, required employer contribution and amount employee receives where the employee is furloughed 100 per cent of the time.
Wage caps are proportional to the hours not worked.
Source: gov.uk 12 July 2020
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For further information about the Government measures to protect individuals and businesses, visit our COVID-19: Support for UK businesses hub.
* Coronavirus JRS updated – New furlough applications close 10 June