In a welcome move, the Chancellor announced further changes to the Coronavirus Job Retention Scheme yesterday (3rd March 2021). The Scheme was originally introduced on 20 April 2020 to support employers who cannot maintain their workforce because their operations have been affected by the Coronavirus.
The Scheme was to close on 30th April 2021 but has now been extended until 30 September 2021 and the level of grant available to employers under the scheme will stay the same until 30 June 2021.
What has changed?
From 1 July 2021, the level of grant will be reduced, and you will be asked to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.
I have summarised some of the key points of the update below, but we will be updating our FAQ document with more information in due course:
- From July, the level of grant will be reduced each month and in July the government will pay 70% 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% of their wages up to a cap of £2,500, for time they are furloughed.
- For August and September, the government will pay 60% 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% of their wages up to a cap of £2,500, for time they are furloughed.
Employers will continue to be able to choose to top up employee wages above the 80% 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.
If you would like to understand more the impact of this change on your business and workforce please do not hesitate to contact the Alcumus PSM HR team for assistance on 01484 439 930 or email [email protected]
Alcumus PSM (People & Safety Management) specialises in human resources (HR) and health and safety (H&S) consulting for small and medium-sized enterprises.
Written by Sally Grundy, Senior HR Consultant