The latest on the Coronavirus Job Retention Scheme

When the Coronavirus Job Retention Scheme was initially made available, its purpose was to issue grants to employers to ensure they could retain and continue to pay their staff despite having to close. Under the scheme, the Government covered 80% of the wages of furloughed employees up to £2,500 a month. In May, the Chancellor announced this scheme will be available to employers until the end of October.

Flexible furlough scheme

On the 12th June, the Government announced further changes to the scheme. Now, as it became more flexible, businesses can start to reopen and bring back furloughed employees. Businesses can now bring back previously furloughed employees from July 1st to suit their requirements on a part-time basis.

These changes give businesses the chance to decide the hours and shift patterns of their employees. The Government will still continue to pay 80% of the wages for the hours that they do not work. While the employees are at work, the business will be responsible for paying their wages. No new employees will be able to go on furlough for the first time, unless they are returning from statutory parent leave.

Businesses have taken different approaches to these new updates. Some opted to rotate employees, bringing them off furlough for several weeks or progressively bringing them out based on immediate requirement. To rotate employees, they must have been furloughed for a period of 3 consecutive weeks before 30 June. From the 1st July, there is no minimum furlough period and employees can be brought back part-time for any hours or shift patterns agreed between employers and employees.

Reduced Government grant

From August, the 80% grant will gradually be reduced. Employers will need to make contributions towards the wages of furloughed employees.

The timeline is set out as follows:

August – Government will pay 80% of wages

Employers will pay ER NICs and pension contributions for the hours the employee is on furlough.

September – Government will pay 70% of wages

Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

October – Government will pay 60% of wages

Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

If you have any concerns about your insurance, don’t hesitate to get in touch with us on 01892 511 144.

 

Related Articles.