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Another essential ‘Furlough Scheme’ update

June 9, 2020
Employment Law

Well, another month has gone by and another update on the Government’s Coronavirus Job Retention Scheme (CJRS) is most certainly in order. After all, the latest figures suggest that a quarter of the UK’s workforce (a total of 8.7 million workers) is now on furlough.

Where are we now?

The CJRS was originally intended to last a minimum of three months from March to May 2020. As a result of pressure from larger employers (who were otherwise threatening to lay off people in their thousands), the scheme was swiftly extended to the end of June.

More recently, in a briefing provided by Rishi Sunak (the Chancellor of the Exchequer) on 28 May 2020, Mr. Sunak confirmed that the CJRS will continue in one form or another until the end of October 2020. However, over the coming months, we will see a number of significant changes to the way in which the scheme operates:

·      Very importantly, 10 June 2020 was the last day on which employers were permitted to furlough their employees.

·      From 1 July 2020, it will become possible to invite already furloughed employees back to work on a part-time basis, with staff otherwise furloughed for the rest of the working week.

·      From 1 August 2020, employers will have to meet the cost of any pension contributions and employee’s national insurance contributions payable in relation to their furloughed staff. 

·      From 1 September 2020, whilst employees who are furloughed will still be entitled to receive at least 80% of their normal pay (capped at £2,500 per month), the Government will only reimburse employers a maximum of 70%, with employers themselves required to make up the remaining 10%.

·      From 1 October 2020, the Government's contribution towards ‘furlough pay’ will reduce to 60%, with employers required to make up the remaining 20%.

The CJRS is expected to close entirely on 31 October 2020.

We are currently awaiting full details of precisely how the ‘new’ furlough scheme will operate over the coming months. As you can imagine, the devil will be in the detail.

Need a hand?

If you need specific advice and guidance on using the CJRS within your business, please contact James Willis (Head of Employment Law) on 07917 712257.

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