The Chancellor has announced that the furlough scheme will be extended until 30 September 2021. This gives employers the opportunity to utilise the Coronavirus Job Retention Scheme (CJRS) for an additional five months, with two notable changes.
Increased Employer Contributions
The first significant change is that employer contributions are set to increase from 1 July 2021:
Until 30 June 2021, employers can claim 80% of an employee's usual salary for hours not worked up to a maximum of £2,500 per month. Employers are still required to cover National Insurance (NI) and employer pension contributions and employers can decide on whether to top up an employee's wage.
However, from 1 July 2021, employers will be expected to contribute 10% of an employee's wages which will increase to 20% in August and September before the CJRS is due to end. This is in addition to the NI and pension contributions and the option to top an employee's wages up.
Employees Who Can Be Furloughed
Previously, an employer could only claim for employees for whom they had made a PAYE real time information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020. However, for claims made after 1 May 2021, employees who were added to the payroll on or after 1 November 2020 and who were employed on 2 March 2021, can be furloughed as long as the employer has made a PAYE RTI submission for them between 20 March 2020 and 2 March 2021.
If you would like further information on the CJRS please contact Alice Reeve in our Employment Law team on 07554 432829, or complete the form below.