Changes to Furlough

Chancellor Rishi Sunak has announced reforms to the Coronavirus Job Retention Scheme “CJRS” on 29 May 2020. 

• The scheme will continue in its current format until the end of July.  However, the scheme will close for new employees on 30 June 2020 and 10 June 2020 will be the last day that employers can place employees on furlough.  So, if you have not furloughed any employees and need to do so, you must do it by tomorrow.  

• From 1 July, 'flexible furlough' is being introduced, meaning employees will be able to work part-time and be furloughed part-time.  Businesses will decide how that will work (in terms of the time split).  Employers will have to pay for the hours worked and still claim under the furlough scheme for when the employee is not working. 

• From 1 August, employers will have to pay employee's national insurance contributions and pension contributions, and can no longer reclaim them through the CJRS. 

• From 1 September, the government will only reimburse 70% of salary (up to a maximum of £2,190). Employers are required to top-up to 80% (or more, depending on what the employer agreed with the employee). 

• From 1 October, the government will only reimburse 60% of salary (up to a maximum of £1,875), and employers will continue having to top up to 80% (or more depending on what the employer agreed with the employee). 

• The furlough scheme will end on 31 October 2020. 

• The self-employed grant is being extended, with applications opening in August for a second and final grant.  There will be parity with the reducing furlough scheme, paying 70% (not 80%) of average earnings up to £6,750.