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The scaling back of furlough, in a nutshell

02 Jun 2020

As the lockdown continues to ease across Europe, and businesses look to identify what their ‘new normal’ will look like as we come out the other side, here are the headlines from the UK Government’s recently announced plans to scale back its support to employers under the Coronavirus Job Retention Scheme (“CJRS”).
 
As it stands:
  • Individuals will need to have been furloughed by 10 June 2020 if their employer is to be eligible to claim wages for them under the CJRS thereafter
  • With effect from 1 July 2020 it will be possible for an individual to work part-time for their employer whilst furloughed, with the employer able to claim wages under the CJRS for the unworked balance of the full contractual hours
  • Employers will have to contribute a greater proportion of furloughed employees’ wage costs, with the increase stepping up on the following monthly basis:
    • for August 2020 – employer NICs and pensions contributions will no longer be covered by the CJRS and must be met by the employer
    • for September 2020 – in addition, employers will need to cover a 10% share of the 80% furlough grant payable for the unworked hours of those on furlough (with a new monthly cap of £2,187.50 applying, and the employer required to at least make up any difference between this and the original £2,500 cap)
    • for October 2020 – the employer will need to cover a 20% share of the 80% furlough grant for the unworked hours (with a new monthly cap of £1,875, and the employer required to at least make up any difference between this and the original £2,500 cap).
The Government states that the tapering off of financial support under the CJRS is intended to reflect the anticipating gradual return to work of furloughed staff over the period. We will be discussing these upcoming significant changes, and other practical issues associated with returns to work post-lockdown, at our webinar on 4 June 2020.

Register to attend the webinar here

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